Background Note | HBS Case Collection | March 2009 (Revised December 2016)

A Strait of Uncertainty: Taiwan's Development in the Shadow of China

by William C. Kirby, J. Megan Greene, Tracy Manty and Yuanzhuo Wang

Abstract

Relations between the People’s Republic of China (PRC), on the Chinese Mainland, and the Republic of China (ROC), on Taiwan, had improved significantly since 2008. Taiwan investment in China had played a major role in China’s economic boom in recent decades. Investments, partnerships, study, travel, and marriages across the Strait pointed to a future of ever-greater interaction between two parties that brought Asia to the brink of war three times in the last half-century (1954, 1958, 1996). But what does the future hold? Will Taiwan thrive and yet maintain its autonomy as a part of the broader economy of “Greater China”? Will economic integration lead, inexorably, to Taiwan’s incorporation into the People’s Republic of China? Or will the 2016 electoral backlash in Taiwan against integration with the Mainland embolden the new Taiwan leadership to seek a future for Taiwan separate from China?

Keywords: History; Development Economics; Investment; Economic Growth; Cross-Cultural and Cross-Border Issues; Financial Crisis; China; Taiwan;

Citation:

Kirby, William C., J. Megan Greene, Tracy Manty, and Yuanzhuo Wang. "A Strait of Uncertainty: Taiwan's Development in the Shadow of China." Harvard Business School Background Note 909-408, March 2009. (Revised December 2016.)