International Relations of the Asia-Pacific Volume 9 (2009) 435–467 doi:10.1093/irap/lcp001 Advance Access published on 11 March 2009 Commerce between rivals: realism, liberalism, and Downloaded from credible communication across the Taiwan Strait Steve Chan http://irap.oxfordjournals.org Department of Political Science, University of Colorado, 333 UCB, Boulder, CO 80309-0333, USA Email:
[email protected] Abstract China has become Taiwan’s most important export and investment desti- by Robert Sedgwick on June 8, 2010 nation. This phenomenon is puzzling to realism as concerns for security externalities should discourage commerce between adversaries. Liberalism also has difficulty in accounting for this phenomenon because an absence of facilitative institutions should discourage commerce across the Taiwan Strait. This paper applies recent theoretical development on credible com- munication to this seemingly baffling situation. Whereas it has been suggested that commercial ties enable states to signal resolve short of military demonstration, I argue that these ties can also be used to credibly communicate reassurance and commitment to peaceful cooperation. 1 Introduction Despite continued political impasse and even occasional military tension, Taiwan’s exports to and investment in China have thrived in Received 10 July 2008; Accepted 12 February 2009 International Relations of the Asia-Pacific Vol. 9 No. 3 # The author [2009]. Published by Oxford University Press in association with the Japan Association of International Relations; all rights reserved. For permissions, please email:
[email protected] 436 Steve Chan recent years. China has overtaken the United States and Japan as Taiwan’s most important trade partner, and it has received more capital from Taiwan’s investment outflow than the rest of the world combined.