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The Europeans regard monetary arrangements as a key element of the overwhelming effort to never again allow hostilities to flare up on their continent. For Taiwan and China, a monetary coordination mechanism may also be appealing in order to eliminate hostilities caused by the Chinese civil war since 1949. Due to certain historical and geopolitical reasons, the impact of a China-Taiwan Economic Union on the world can not be measured by its economic scale only. On the basis of Robert Mundell's earlier proposal and the current development of the European Monetary Union, this paper provides a framework to analyze whether the establishment of a Chinese monetary union (CMU) could be sustained after suffering various economic shocks. We assume that a Chinese central bank coordinates the single monetary policy of the Chinese Economic Area and that China and Taiwan maintain their fiscal independence. An international policy coordination approach is used to simulate possible outcomes if the CMU were to be implemented. The simulation indicates that the U.S. and Japan may suffer welfare losses if China and Taiwan insist on their monetary unification. However, if both the U.S. and Japan accept the CMU, further international policy coordination may help them decrease such kind of losses. The analysis is preliminary but may be helpful in considering the East Asian economic policies. [ABSTRACT FROM AUTHOR]

In its relations with Taiwan and China, Washington has begun to implement separate dual strategies in order to simultaneously deter unilateral action while balancing out the rival political and military forces of each side. A simple standard strategy just is not sufficient to maintain the status quo. The way to maintain peace is for Washington to keep its role as a moderator between the two sides while preventing both from taking unilateral steps toward goals that would naturally provoke the other. US policy has to mirror the duality of the cross-strait arena by implementing dual balancing and deterrent strategies. It is also imperative that policymakers realize the complexity of the situation so as not to unwittingly provoke either side. This paper is an analysis of the emerging US strategy of deterring both sides of the Taiwan Strait from taking unilateral action while maintaining a balance of military and political forces, and gives some suggestions as to the further development of this strategy. [ABSTRACT FROM AUTHOR]

Analyzes Taiwan's crossstraits economic policy in the 1990s through the use of the state-centered approach. Features of the use of the strong-state paradigm; Features of the economic interaction across the Taiwan Strait; Adjusted exports to mainland China from 1981 to 1994; Taiwan's economic dependence on mainland China.

The article presents an account of Taiwan's efforts to improve relations between Taiwan and mainland China, while pursuing greater economic engagement throughout the Asia-Pacific region and worldwide. The benefits of economic development in the context of globalization and regional integration are emphasized, and the importance of mutually beneficial political and economic arrangements between Taiwan and China is stressed. The Taiwanese government is described as focusing on flexible diplomacy, peace and prosperity.