Taiwanese Investors and Local Government in Mainland China

Abstract

In chapter 4, I examined the industrial organization and institutional basis of government—business relations in Taiwan and economic interactions across the Taiwan Strait. But any study of economic interactions across the Strait remains incomplete without an explication of state—business relations on the mainland. The fact that so many Taiwanese businesspeople have been attracted to the mainland suggests that an inquiry is needed into the interactions between Taiwanese businesses and local governments on the mainland, and between small Taiwanese investors and local firms. This chapter analyzes the dynamics involved in the political economy of China’s contemporary transformation, and the nascent growth of state—business relations at the local level, especially between local governments and small investors from Taiwan. This analysis is reinforced with a case study of Taiwanese investment in Jiangsu, the Chinese province with the largest concentration of Taiwanese investment. Theoretically, it invokes the concept of the state as a disaggregated complex to provide a corrective to the traditional conceptualization of the state as a unitary entity.

The research findings that underlie an earlier version of this chapter first appeared in article form as “Like fish in water: Taiwanese Investors in a Rent-Seeking Society,” Issues & Studies Vol.35, No.5, September/October 1999. 61–94. I am grateful for permission to reprint it here.