The central question this thesis seeks to answer is: why has there been a change in
Taiwan’s economic policymaking towards China since the 1990s. The study looks at this
changing relationship through the lenses of two International Political Economy theories,
economic nationalism vis-à-vis economic liberalism. By examining three distinctive
Taiwanese administrations: Lee Teng-hui (1990-1999), Chen Shui-bian (2000-2007) and
Ma Ying-jeou (2008-Present), this study explores the motivations underpinning Taiwan’s different economic policy choices. To illustrate, the study considers internal factors,Taiwan’s domestic politics and the role of its business society, and external factors,China’s rise in economic, diplomatic and military aspects and an important
regional/global event. This thesis finds that it is the nationalist goal of protecting Taiwan’s security and maintaining its ‘sovereignty’ that has motivated its cross-Strait economic policies, and in the case of Taiwan, this nationalist purpose is dependent upon the assessment of China’s expanding strength. These findings are important because, as the thesis suggests, there is a potential framework to understand the way in which small states embrace policy choices reflecting their regional realities with large powerful states.