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Economic statecraft is a critical aspect of China’s foreign policy and has played a vital role in China’s relations with its Asian neighbors. The Chinese economic ties with Asia are significant not only because China is the second largest economy in today’s world but also because it has an important impact on regional economic co‐operation and international supply chains. Relentless growth in military buildup and more assertive foreign policy led many pundits to focus almost exclusively on political and military aspects of the Chinese grand strategy in Asia. The purpose of this study is to re‐examine this picture by studying China’s economic statecraft in the region.

This paper will address following research questions: How does the Chinese foreign economic policy serve its political aspirations in East Asia? Why has China increasingly relied on a combination of economic pressures and incentives to achieve its foreign policy objectives? How effective is China’s economic diplomacy as a strategic weapon? What are the limitations of such policy? What challenges does Beijing face in exercising its economic power in East Asia?

Beijing has a comprehensive, long-term grand strategy in Asia, and economic statecraft is a major component of it. Economic statecraft is a double-edged sword. It has given the People’s Republic of China more political influence but frictions and disputes between China and its trading partners are growing as well. Even with the slower growth of the Chinese economy, China will continue to be a game changer for the region. The economic diplomacy has long been part of the foreign policy toolkit used by the People’s Republic of China and will play more important role in the years to come.

Thus far, China’s expanding economic ties with many countries in the world have not generated significant spillover effects. Although China is the dominant economic partner for every country in East Asia, its “soft power” remains to be weak. With the slower growth of the Chinese economy, another looming issue is whether China is going to be able to make a shift away from a trade- and export-led growth model that brought its dramatic economic success. All these could lead China’s economic statecraft less potent. Meanwhile, it should be noted that Asian economies that once relied on the USA are reaching a turning point as China comes to the fore, a trend that may challenge the existing international order. Should this momentum continue, it could alter the balance of power between Washington and Beijing in the region.

For Beijing, economic statecraft concerns both the economic dimension of foreign policy and the strategic dimension of economic policy. Although there is a growing literature on China’s soft power and military capabilities, the study of the economic dimensions of China’s foreign policy remains underdeveloped. With rising confidence and sophistication, Beijing has deployed economic resources to achieve geopolitical aims.

Needless to say, China’s economic statecraft has already triggered heated debate in the United States, Asia and elsewhere in the international community. However, the study of the Chinese economic diplomacy has received relatively little scholarly attention in the English-speaking world. This paper will fill a gap in the analysis and literature.

This chapter investigates the evolution of cross-strait economic relations and Asian regional integration and its implications for future development in the region. Trade and investment in Asia is fundamentally market-driven, and cross-border FDI is the major driving force. This investment-induced trade explained the cross-strait economic relations and intensive trade in intra-industry and intra-regional trade in Asia. The rise of China in 1990s with the assistance of Taiwanese firms further accelerated the trend of integration by forming regional production networks. However, after 2000 institutional arrangement like bilateral or plural-lateral FTA emerged to normalize and institutionalize the de facto economic integration. RCEP and TPP have evolved as the two major platforms for Asian regional cooperation with two key players, China and the United States, on each side. We argue that in the long run the win-win solution that the two platforms will further merge into FTAAP, which benefits all participants including China and the United States. However, in the short run, based on its 50 years of developmental experience, Taiwan can play an important role to promote and consolidate Asian regional integration as a technology provider and resource coordinator for the region and a risk buffer for entering Chinese market. We thus propose a roadmap for Taiwan and China to jointly participate in regional integration process. In the intermediate run, Asian economies need to change the structure toward more regional-centered trade in final goods through domestic consumption market in order to reduce the dependence on Western markets and mitigate any loss may arise from external shocks.

The purpose of this paper is to explain how post-1997 Hong Kong has been perceived in Taiwan and to critically evaluate the demonstration effects of Hong Kong under the “One Country, Two Systems” policy on cross-strait relations.

“Today’s Hong Kong, Tomorrow’s Taiwan” has become a dominant discourse in cross-strait relations in recent years. The paper has adopted discourse analysis of selected texts during and after the 2014 Sunflower Movement to elucidate the disapproval of the developments of post-handover Hong Kong and the construction of the Movement’s self-identity.

It has observed the following arguments which shaped the prevailing perceptions among critics of the “One Country, Two Systems” policy: political infiltration of China in Hong Kong could be extended to Taiwan in the sense that the Beijing authorities would adopt the identical approach to manipulate Taiwan through the cross-strait trading agreements; negative perceptions and images of China and Chinese capitals as a collective aggressor and a threat, raising fear and worries in both Hong Kong and Taiwan; and Kuomintang, as a ruling party at that time under the leadership of President Ma Ying-jeoh, was dismissed by protesters as an incompetent gatekeeper and defender of Taiwan’s interests.

The pervasive sentiments and perceptions about post-1997 Hong Kong has been articulated discursively by the young activists in Taiwan and Hong Kong into a statement – “Today’s Hong Kong, Tomorrow’s Taiwan” – which has brought about a somewhat unexpected bonding effect between Hong Kong and Taiwan through a strong disapproval of “One Country, Two Systems” and the China factor, which has be reproduced, delivered and circulated in both societies since 2014.

After Ma Yingjeou's re‐election in 2012, Mainland China and Taiwan will continue cooperation in economic fields. The purpose of this paper is to undertake research on a bilateral investment agreement (BIA) between Mainland China and Taiwan.

The paper uses statistics to demonstrate the growing cross‐strait investment and incompetent contemporary investment protection mechanisms in Mainland China and Taiwan. The paper also compares laws in Mainland China and Taiwan and the investment protection agreements concluded by Mainland and Taiwan with other countries, respectively.

Based on the similarities of current laws and the investment protection agreements concluded by Mainland China and Taiwan with other countries, respectively, Mainland China and Taiwan can possibility agree upon major provisions of a BIA. Solutions are provided to both macro and micro challenges against a successful BIA.

It is hard to predict whether the BIA will promote political integration between Mainland China and Taiwan in the near future.

A BIA can boost investors' confidence.

This paper may serve as a humble reference for both the Mainland China and Taiwan government when negotiating the BIA.

Cross‐strait investment is an important and prosperous field in practice, but has not been fully explored in literature thus far. This Article aims to fill this gap.

The purpose of this paper is to explore how the USA seeks to promote its interests in peace and stability in the Taiwan Strait in the context of Taiwan’s unique political status and its democratic system.

A narrative analysis examines the recent history of Taiwan’s democratic development and USA responses to it.

The USA has responded in various ways to the dilemma of respecting the outcomes of elections in friendly democracies while protecting its own interests in peace and security. This was easy during the Ma Ying-jeou administration (2008-2016) but it is likely to become more difficult following Taiwan’s presidential election in January 2016.

This study draws on personal experience and an in-depth understanding of Taiwan politics and US diplomacy.