The Tiger Leading the Dragon: How Taiwan Propelled China’s Economic Rise

After Taiwan’s labor costs rose in the 1980s and the island’s first democratically elected president lifted the ban on travel to China, many entrepreneurs moved their manufacturing operations to the mainland. They found a warm welcome from a Chinese government that was eager to foster its own export sector. Rigger insightfully relates the good and bad mainland experiences of various businesses, from umbrella manufacturers and bicycle makers to high-tech enterprises such as Foxconn, which produces most of the world’s iPhones; the computer maker Acer; and the Taiwan Semiconductor Manufacturing Company, which makes crucial high-end computer chips. She entertainingly describes how some Taiwanese firms created new markets in China for coffee, noodles, and bridal photos. The transfer of capital, technology, management skills, and international business connections helped the Taiwanese economy and contributed to a thaw in cross-strait relations but also strengthened China’s economy and its ability to put pressure on Taiwan. More recently, as mainland labor costs have risen and Taiwanese firms have faced tougher competition from mainland firms, many Taiwanese are moving their manufacturing operations elsewhere, some of them back to Taiwan itself.