Taiwan Domestic Trends

Taiwan is emerging in the 21st century as a highly developed and successful capitalist democracy with one of the most transparent societies in Asia. This new identity is creating tensions with the mainland as a sense of independence is spreading throughout the various sectors of society. Developments in Taiwan's politics, economics, culture and society affect the stability and prosperity of the island and have the ability to influence relations with the mainland.

Taiwan's political evolution has transformed the cross-Strait issue from one between elite political parties to one in which public opinion must be taken into account, as it has the power to drive or constrain the choices of Taiwanese elected officials – and perhaps PRC leaders – on matters of the island's sovereign future. The PRC has also gone through a political shift in recent years as the leadership began to move away from socialist roots. Because of this transformation of ideals, the PRC has come to view Taiwan more as a necessity of territorial integrity than a pawn to fuel anti-American sentiment.

Similarly, Taiwan's status as the world's fourteenth largest economy, currently transitioning from a high-tech manufacturing center to a more advanced service-based economy, will influence the choices Taiwan makes in its future relationship with China. This is particularly important, as the mainland becomes the base of choice for Taiwan businesses looking offshore for low-cost labor. The inherent tensions between these economic and political considerations will be a substantial challenge for Taiwan's future leadership.

Developments in Taiwanese culture and society signal changes in the method and conditions under which the island may engage with the mainland in the future. The development of distinct cultural and social norms, particularly the values and ideas around which Taiwanese organize and express themselves, will further determine whether perspectives and attitudes between the two sides of the Taiwan Strait converge or diverge over time. Currently the growing sense of a Taiwan identity among the population could potentially escalate tensions between Taiwan and mainland China. As the Taiwanese move closer to this new perception, political, economic, cultural and socials ideals will also continue to transform.