The Economics of Cross Strait Instability: The Methods and Limits of China's Economic Coercion against Taiwan

Abstract

This article examines the ways China employs economic coercion to influence Taiwan, and the limitations of these tactics in influencing Taiwan’s domestic politics. Although there is ample research conducted on the broader theme of Cross-Strait relations, there have been fewer attempts at analyzing the variety of ways China uses economic coercion to impact Taiwan’s domestic politics. China’s growth in the past several decades has resulted in China becoming a dominant power in the global economic sphere. Meanwhile, it has become Taiwan’s largest trading partner. While there are a variety of tools China has employed, they have ultimately been met with limited success, as Taiwan has responded both proactively and reactively to mitigate vulnerabilities. Furthermore, the deepening of Taiwanese democracy and identity further exemplifies the weakness of China’s attempts to bring Taiwan within the sphere of direct influence, and public opinion continues to favor maintaining the status quo over reunification.