On both sides of the Taiwan Strait there has been a change in leadership, resulting inevitably in the formulation of policy reflecting the leaders' visions of the future of their countries and plans for moving forward. On both sides, efforts at reforms have been observed, debated and studied. The purpose of this book is to show how the shift from KMT to DPP rule in Taiwan's government in 2000 has affected the Chen Shui-bian administration's dealings with mainland China, and vice versa. The authors are well-informed university professors and scholars who do a great service in explaining the challenges faced, and achievements made by Taipei and Beijing.

Among Chen Shui-bian's priorities are programs to stamp out corruption in politics. Known as "black and gold politics" political corruption in Taiwan has its sources in the country's early political life. Chen has also worked to formulate DPP policy regarding national identity and to adopt a new direction in Cross Strait relations. But DPP efforts have been hampered by KMT dominance in the legislature. Despite some success in the 2001 legislative elections, the structure of the political system means that the prime minister, while being appointed by the president, is accountable to the legislature, which can remove him or her with a no-confidence vote. Success implementing reforms has proved elusive and Chen Shui-bian is battered by the economic woes besieging the country.

Authors Quangsheng Zhao and Elizabeth Dahl, of the American University, say in one interesting chapter dealing with mainland China's policy towards the DPP regime that Beijing is deeply suspicious of Chen Shui-bian and his intention to improve cross-strait relations. The authors say Beijing places great importance upon historical legacies, and has adopted a wait-and-see attitude as to whether real regime change has occurred in Taipei. They also say that Beijing maintains a hard position on the "one China" principle, is building its economic offensive on Taiwan and relies on the dynamics of international diplomacy. The authors say Beijing might wait until after 2004 elections in Taiwan to restart cross-strait talks. Beijing, they argue, wants to see whether Chen Shui-bian is re-elected for a second term, which would indicate a real regime change, and whether the DPP will move toward independence by abandoning the "one China" principle. Beijing is faced with one of four possible outcomes given its wait-and-see attitude: a second-term Chen regime, a comeback KMT regime, a new government headed by James Soong or a coalition government in Taipei.

The regimes in both countries are challenged by ongoing economic difficulties and demands imposed by accession to the World Trade Organization (WTO), which requires major overhauls of domestic legislation and local economy. The competition on both sides of the Taiwan Strait to maintain superiority in certain economic sectors and rankings in world trade positions has been fierce.

Mainland China has become a strong competitor in information technology (IT), which is boosted by its WTO admission and the high volume of foreign direct investment (FDI) it is receiving every year, among other factors. Its IT rise also reveals its quest for technological development, which is a threat to Taiwan's well-established high-tech industries in the fields of computers, telecommunications and information. Peggy Pei-chen Chang of the Chung-hua Institute of Economic Research and Tun-jen Cheng of the College of William and Mary say that Taiwan's "Go Slow, No Haste" policy is being seriously eroded by Taiwanese businessmen who have invested in the mainland. The authors support their argument of Beijing's rise in IT with ample statistics comparing computer hardware production among several countries, the FDI flows and distribution in mainland China as well as Taiwanese business presence in the mainland and a host of other relevant information on the economic interaction across the Taiwan Strait. But the authors still question whether the mainland can supplant Taiwan in the high-tech sector given the latter's advance in management, design, and production and its strong relationship with firms in the United States.

"Taiwan still has a technological edge over the mainland," the authors say, while handing out some good advice as to how to maintain that edge.