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This paper explores how and why China has been perceived as an economic threat in Taiwan through an examination of Taipei's post-Cold War economic policy with respect to the mainland. While Taipei's restriction on trade and investment across the Taiwan Strait until mid-2008 was widely considered a failure by both opponents and supporters of closer cross-Strait economic ties, this analysis points to an overlooked function of Taiwan's economic policy that was not just about tackling the problems of the security externalities or promoting the island's economic development. What appeared to be an ineffective policy can be understood as a successful boundary-drawing practice that discursively constituted a vulnerable Taiwan under Chinese economic threat, hence conducive to the (re)production of Taiwanese national identity. [ABSTRACT FROM AUTHOR]

The article focuses on the relation between China and Taiwan, as well as South and North Korea. It examines the success of China and Taiwan in functionalist cooperation and exchange despite its failure to shift economic cooperation into political cooperation through a neo-functionalist political package deal. It also explores aspects that influence the regression of the economic cooperation and human exchanges between North and South Korea. It notes the move of China and Taiwan in utilizing functionalism to augment economic cooperation without touching the issue of sovereignty. Furthermore, it cites integration patterns of divided countries basing on inter-Korean and cross-Strait relations, and discusses their implications on regional integration theories.