Changes in Triangular Economic Relations between Japan, China and Taiwan in the 21st Century

[[abstract]]After World War II, Japan’s successful experience in adopting industrial policies of import substitution and export expansion, as proposed by Akamatsu’s model of the “flying geese pattern of development” (1935), was held up as a lesson for Taiwan and other developing countries such as Korea, Hong Kong, and Singapore in the 20th century. They were also successful in becoming the newly-industrialized countries, being referred to as the “Four Asian Tigers”. The background for this successful model was that the United States of America provided a big market for those countries, especially for Taiwan, and that Japan played an important role in constructing a triangular relationship between Japan, the United States and Taiwan. In that relationship, Taiwan imported machinery, equipment and industrial materials from Japan for producing manufactured products, and then exported them to the United States. That was during the 20th century. However, entering the 21st century, this triangular relationship has changed into the one between Japan, China and Taiwan due to China’s ascendancy. China’s GDP was closed to that of the United States in 2011, and it is forecasted to become the biggest one during the first half of the 21st century. Will China play the same role as the United States did in the 20th century ? It is for us to guess. Are Japan and Taiwan ready to respond to this change ? This paper, therefore, focus on this and its effects