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In the wake of a communist victory in the late 1940s, the nationalist Chinese fled mainland China for the security of the island of Formosa. Today the island is known as Taiwan and has its own independent, multiparty government and popularly elected president. It is industrialized and is considered one of the Asian economic “Tigers.” One of the pillars of American foreign policy during the Cold War was that the island of Taiwan should remain independent. But political and economic realities have caused the United States to remain pragmatic in its relationships with both the government of the People’s Republic of China and Taiwan over the last 30 years. Taiwan joined the WTO under the name “Chinese Taipei,” encompassing the “separate customs territory of Taiwan, Penghu, Kinmen, and Matsu.” Examine the history of Taiwan and its relationship to China. What do you think of U.S. policies toward the region? While both mainland China and Taiwan are “Chinese,” doing business in Taiwan differs greatly from doing business in China. Describe that difference. How do business opportunities differ on the mainland versus the island? What do you think of the prospects for reunification, and what would be the impact on firms operating there?

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