The Development of Taiwan's European Trade and Outward Investment in a Global Perspective

Analysis of Taiwan's economic experience since the 1950s highlights the critical importance of the external orientation of Taiwan's development strategy. In particular, foreign trade has played a pre-eminent role in generating economic growth and associated structural changes. From the late 1950s until the 1980s, in common with the other East Asian “dragon” economies (South Korea, Hong Kong and Singapore), Taiwan exhibited some of the classic hallmarks of trade dependence. Few would deny that the performance of its foreign trade sector – especially the linkages that were forged between the expansion and diversification of trade links overseas, and domestic industrial transformation and modernization – have been a key ingredient in the emergence of a “Taiwan development model.”

All European countries, with the exception of the Holy See, have established diplomatic relations with the People's Republic of China (PRC), and, consequently, have developed non-official ties with Taiwan. The latter are limited to the economic and cultural sphere, and should leave aside any move or transaction suggesting that Taiwan is anything else than a part of China under the PRC's rule. This article will broadly confirm this picture.Unless otherwise stated, this article is based on interviews carried out in Taipei in July 1989, October 1991 and October 2000.

During the last quarter of the 21st century, the People's Republic of China (PRC) and the European Community/European Union (EC/EU) have been similar and different, compatible and incompatible players at the same time. Both remain “unfinished” international actors, China because of a lack of functioning state institutions, and the EU because its component members survived as nation states. And whereas the partial opening-up of the vast Chinese market under Deng Xiaoping very much corresponded to structural changes in Western Europe and two European recessions, their respective approaches to world order issues were mutually contradictory in fundamental respects. On the European side, stable democracies had subscribed, as a matter of principle, to the liberal paradigm of non-violent conflict solution and to the universal applicability of human rights. At the same time, the PRC had judged it necessary to strengthen its sovereignty in the interest of a national agenda that bordered on the nationalistic and irredentist, thus keeping its option open, as a matter of principle, to resolve conflicts through force. During the 1980s, Sino-American irritations followed by the gradual demise of the Soviet bloc slowly invalidated the basic strategic framework for EU-China relations. Subsequent attempts at building a new framework have thus far remained unconvincing.

Cultural relations, foreign cultural policy and cultural diplomacy are often thought of as synonymous, but while cultural relations include foreign policy and diplomacy, they in fact go far beyond the scope of purely governmental activities. They comprise much more than foreign cultural policy, in which culture is used mainly as a tool to promote the interests of one country and frequently reflects the domestic policies of whichever political party happens to be in power. Cultural relations encompass the mutual influence and exchange of cultures on and between two (or more) states or nations as well as both private and public initiatives to promote the culture of the individual state or nation and to organize cultural exchanges.

More than a decade after the end of the Cold War, both the European Union (EU) and the People's Republic of China (PRC) are usually regarded as important political and economic actors in a globalizing international environment. While the United States as the third important partner is heavily divided in its China policy between proponents of a policy of containment and their opponents favouring engagement, European countries have without exception followed a policy of “constructive engagement” towards China. The PRC in return is strengthening its relations with Europe, seeking not only improved trade relations, but also a deepened political dialogue and intensified co-operation. Apart from policy statements, however, Europe is far from implementing a consolidated and integrated China policy.