The Political Economy of Taiwan's Foreign Policy

The Political Economy of Taiwan's Foreign Policy This paper analyzes the development of Taiwan's foreign policy since 1979 from a political economy perspective. It points out that the breaking-off of US-Taiwan diplomatic relations in 1979 was a watershed for Taiwan's foreign policy development. Under the general circumstances of international diplomatic isolation, Taipei continuously readjusted its mainland policy in response to its growing economic power and rapid transition to a democratic polity at home, on the one hand, and to the changing cross-Strait relations and the loosening up and disintegration of the Cold-War system abroad, on the other. The readjustments have eventually led to a new stage of cross-Strait relations characterized by economic convergence and political divergence. Proceeding from its uncompromising adherence to the one-China policy before 1979, Taipei moved gradually towards a position of sticking to the one-China policy only in inter-governmental and international activities, yet adopting a flexible "practical diplomacy" policy in non-governmental organizations. From there, it moved further towards the stand of "pragmatic diplomacy" of not avoiding dual diplomatic recognition of both sides of the Strait. Finally, it explicitly defined "pragmatic diplomacy" as an active pursuit of the ROC's sovereign status in the international community under the principle of "divided nation." In the course of Taipei's progressive readjustment of its foreign policy, the emergence of a libertarian-civic state in Taiwan obviously laid an important foundation; Taiwan's enormous and still fast growing economic strength provided a powerful means; and, the loosening and disintegration of the Cold-War setup offered a good opportunity. The congruence of these three factors constituted the comprehensive framework for Taipei to direct the development of cross-Strait relations and Taiwan's foreign relations in a dialectical way that served to maximize the political autonomy of Taiwan.