82 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 43 | 2025 support for LGBTQIA+ rights, indigenous recognition, and a robust civil society. Taiwan’s cultural renaissance reinforces its democratic character through the indigenization of curricula, expression of folk art, and establishment of research centers and museums to preserve Taiwanese culture and history. The Community Construction Movement boosted awareness of Taiwan as the “homeland,” severing connections with the Chinese-centric identity that the KMT promoted (Chang, 2004). This shift influences Taiwan’s political direction while fostering a deeper connection among citizens who identify with the island’s unique history and social values. These developments have earned Taiwan international recognition for its commitment to individual freedoms. In 2024, Freedom House, an organization that ranks freedoms of political rights and civil liberties, awarded Taiwan a 94 out of 100—a rating higher than the US’s (83) and far above China’s (9) (Countries and territories, n.d.). Taiwan’s commitment to self-expression resonates beyond its borders, offering a model of resilience and democracy in the face of external threats. A contrast with Hong Kong highlights what is at stake. After the British handed over Hong Kong to China, the two lands were to function under a “one country, two systems” formula. Despite such promises, China’s imposition in 2020 of the Hong Kong National Security Law virtually silenced the press, universities, courts, and legal professions, essentially outlawing free expression. Mainland China dictates Hong Kong citizens’ identity, loyalties, and speech—a fate Taiwan strives to avoid (Davis, 2022). Most Taiwanese citizens support and sympathize with Hong Kong protestors, emphasizing democratic solidarity, social freedoms, and progressive social policies (Rich & Eliassen, 2020). Taiwan’s identity in the global context Taiwan’s growing confidence in its own identity, which transcends political and ethnic divides, strengthens its global position and leverage with other nations. This cultural reality underscores its independence from China and has become central to its diplomatic and trade relations. Taiwan’s political stability and commitment to free elections and self-determination foster credibility in its relationships with other democracies. As Pelosi’s visit and the more than US$150B in bilateral trade (Office of the United States Trade Representative, n.d.). illustrate, the US, in particular, has long-term, deeply embedded ties with Taiwan. Taiwan’s global position rests on a complex interplay of identity, rights, and economic clout. This small island engages heavily with the entire world, sending students, skilled workers, and tourists everywhere. The Taiwan Strait carries over one-fifth of global maritime trade, approximately $2.45T worth of goods in 2022 (Funaiole et al., 2024). Its semiconductor supremacy and strategic maritime location have evolved beyond mere commercial advantages into instruments of democratic resilience. Four of the world’s 10 largest semiconductor foundries are located on this island. The largest, Taiwan Semiconductor Manufacturing Company, producing ~90% of advanced chips globally, does more than feed supply chains—it provides leverage against Beijing (Jones & Krulikowski, 2024). From the largest cargo ship to the smallest microchip, there are many reasons for Taiwanese pride. Taiwan’s identity has become inseparable from its role as a democratic bulwark in East Asia, with global implications. Moreover, Taiwan has built substantial soft power and public diplomacy internationally as a way to attract and persuade other nations to adopt similar goals and separate from Beijing. In 2000, Vice President of Taiwan Annette Lu identified five elements of Taiwan’s soft power: human rights, democracy, peace, love, and high technology (Office of the President…, 2002). In 2019, the government established the Taiwan Creative Content Agency to bridge the gap between domestic creators and global audiences. The agency oversees 10 major cultural sectors: movies, TV shows, pop music, publications, animation, gaming, comics, fashion design, art, and immersive content. These avenues help Taiwanese content reach international platforms, drawing inspiration from South Korea’s successful Hallyu (Korean Wave). This effort not only markets Taiwanese media abroad but also allows Taiwan to export narratives rooted in democracy, technology, and pluralism—not coercive projection but attraction through authentic storytelling. The juxtaposition between Taiwan’s governmental support for citizen communication and China’s media censorship allows Taiwan to achieve diplomatic success indirectly, winning international support through technological innovation and genuine cultural exchange rather than traditional geopolitical pressure (Wu, 2022). Future scenarios There are three primary cross-strait scenarios: Taiwan sovereignty, unification with China, and maintaining the status quo. Each of these paths presents fundamental questions about what it means to be
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