Economic Integration Across the Taiwan Strait

Economic Integration Across the Taiwan Strait

Global Perspectives

Edited by Peter C.Y. Chow

Despite their controversial political relationship, Taiwan and China remain very much entwined economically. This timely volume explores the complicated state of economic and trade relations between the two countries, meticulously unraveling the issue’s various threads and presenting an authoritative breakdown of a complex and fascinating economic linkage.

Chapter 8: Global production networks and the Kunshan ICT cluster: the role of Taiwanese MNCs

Tain- Jy Chen and Ying- Hua Ku

Subjects: asian studies, asian economics, economics and finance, asian economics, international economics


The most outstanding feature of Kunshan as an emerging ICT (information and communications technologies) cluster in the world is its rapid transformation from farmland into a powerhouse of industrial production within 2 decades or so. Before the transformation, there was no apparent endowment of skilled labor in the region, and skilled workers are considered to be a precondition for the birth of a high- tech cluster (Bresnahan et al., 2001). Most observers of the dramatic rise of Kunshan pointed to the role of global connections, whereby Kunshan was largely seen as a relocation and reconstruction of the ICT cluster that previously existed in Taiwan. This view is over- simplified. It provides little explanation as to how these global connections have worked wonders for Kunshan, what circumstances have induced the relocation of the cluster from Taiwan to China, and what local conditions have made the relocation possible. Without answers to these questions, the rise of Kunshan can only be attributed to pure luck. The main purpose of this paper is to find these answers. The work is based on a field study in Kunshan conducted in April 2007 and a follow- up trip in October 2011.

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