The dynamics of political and economic interactions between Mainland China and Taiwan**The authors would like to thank Jessie Poon and three anonymous referees for their comments and constructive suggestions. Any remaining errors are ours

The purpose of this article is to examine the trade and economic linkages across the Taiwan straits from the dynamic economic and political perspectives. In particular, we study the pattern and structure of the cross straits trade and business linkages using game theory arguments. We assess the increasing economic interdependence between Taiwan and Mainland China, particularly the enduring political deadlock, by examining issues related to “Taiwanification†, the dynamic instability, Taiwan's Mainland policy, and Taiwan in Beijing's Grand Strategy.