1 November 2010


Kerry Brown

Professor Kerry Brown

Associate Fellow, Asia-Pacific Programme

Justin Hempson-Jones and Jessica Pennisi


  • Taiwan has made significant investments into the Mainland since the early 1990s, after government restrictions were lifted, and is now one of its most important partners.
  • The story of inward investment from Taiwan into China has now been replaced by the story of Mainland investment outwards and into the island.
  • Taiwan has committed itself to pragmatic diplomacy under President Ma. One of the main impacts of this has been the recognition that to achieve strong growth, Taiwan has to engage with the Mainland, one of the world's largest emerging markets. In order to do this, Taiwan needs policies that allow it to enjoy the benefits of these deeper links but address the risks of political interference that come from them.
  • As a successful democracy with good levels of governance, a strong rule of law, and successful internationalized companies, Taiwan has unique leverage with the Mainland.
  • For Taiwan, policy-makers now have to accept that the greatest chances for growth will arise from engaging with the opportunities in the Chinese market, despite the political risks. Clear sectors and policies need to be set out for Chinese inward investment into Taiwan.
  • Taiwan should continue to modernize and upgrade its own investment, legal and political, environment, so that it remains an internationally respected, modernized territory.