In 1949, People’s Republic of China was established by the Communist Party of China in Mainland China. The Republic of China moved the original government from Nanking to Taiwan. From then on, separated by the Taiwan Strait, the long standing opposition and political divide between the two governments began. Before November 1987, President Chiang Ching-kuo had allowed the general public to visit Mainland China. Subsequently, trade and economic relations across the strait also started to progress.
The Taiwanese economy essentially depends on export; the Taiwanese government tends to implement economic policies that benefit its global trade, hoping for positive effects on economic cooperation from liberalism, e.g., liberalization of economy, establishing Asia-Pacific Regional Operations Center, etc. However, as realism prevails, due to the unique relationship between Taiwan and Mainland China, the Taiwanese government has more economic and political considerations; “Southward Policy” and “Jie Je Yong Ren Policy” stem from politics, while there’s no denying the rise of the Chinese economy and its great importance for global economic development. Because of globalization, the trade and cultural exchange between the two sides become more frequent. Taiwan utilizes labor from China and low-cost materials to create advantage in international trade. “Southward Policy” and “Jie Je Yong Ren Policy” show Taiwan’s insistence on avoiding excess dependence on Mainland China for its economic policies. On the other hand, it’s necessary for Taiwan to gain advantage in global trade and to interact with Mainland China. As Taiwan and Mainland China interact in the context of politics and trade, the government policy is the theme of this study.
Key words: Realism, Liberalism, Globalization, Southward Policy, Jie Je Yong Ren Policy, Asia-Pacific Regional Operations Center