Taiwan's future is bound up with the mainland, and already cross-strait ties are flourishing, thanks to greater co-operation. Investments have increased significantly, predominantly involving Taiwanese corporations moving to - or collaborating in joint ventures on - the mainland.

Cultural, educational, religious and sporting exchanges have also helped close the gap. The National Palace Museum in Taipei, and Beijing's Palace Museum have worked together on exhibitions and academics and scholars are pooling their knowledge and visiting each other's institutions.

School exchanges are taking place regularly, and religious institutions are also stepping up contact. Most significantly, Taiwan and the mainland have rushed to each other's aid in times of crisis. In the wake of the devastating earthquake in Sichuan in 2008, an expert search and rescue team from Taiwan aided in the quest for survivors, while the Taiwanese Red Cross and charities organised shipments of aid material.

Taiwan's increasingly good relations with the mainland are just another step forward in its burgeoning economic development. Having required overseas aid in the 1950s, by the end of the 20th century, it had become an aid donor in its own right, and being a major foreign investor.

Taiwan runs a large trade surplus, and can boast of a GDP of US$379 billion, while its foreign reserves are the world's fourth largest, behind the mainland, Japan and Russia. Because of its conservative financial approach and its entrepreneurial strengths, Taiwan suffered less severely than expected during the global financial crisis in 2008.

And, in contrast to Japan and South Korea, small and medium-sized enterprises make up a large proportion of businesses, with about one in seven people running their own company.

Foreign trade was the catalyst in Taiwan's rapid growth for decades. The island's economy remains export-oriented, so it depends on a trade regime that is open around the world. The total value of trade increased more than fivefold in the 1960s, nearly double that in the 1970s, and it doubled again in the 1980s, only to slow slightly in the 1990s. Its exports were originally mainly agricultural commodities, but are now almost entirely industrial goods. Electronics continues to rank high in the export sector, and Taiwan receives substantial investment in the field from the United States. Taiwan has been a member of the World Trade Organisation (WTO) since 2002.

The island's prowess in electronics and related industries knows few bounds. Taiwan is one of the world's foremost suppliers of computer chips, and is also highly skilled at manufacturing LCD panels, computer memory components, networking equipment, and the design and manufacture of consumer electronics. Textile production has slowed slightly in recent years, but it remains a significant industrial export sector. While the US is one of Taiwan's largest trading partners, taking about 15 per cent of the island's exports, it's the mainland that dominates Taiwan's imports and exports, that are growing rapidly as both economies become more interdependent. Imports from the mainland consist mainly of agricultural and industrial raw materials.

Taiwan continues to spread its sphere of influence around the world, and maintains cultural and trade offices in more than 60 countries with which it does not have official relations. The island is a member of the Asian Development Bank and the Asia-Pacific Economic Cooperation forum. Such developments reflect Taiwan's economic importance and its desire to become further integrated into the global economy. It continues to negotiate with the US for a Free Trade Agreement and, in June this year, concluded an Economic Cooperation Framework Agreement with the mainland, which it is hoped will greatly widen the market for Taiwan's exports.

In future years, Taiwan faces similar economic issues as other developed economies. The island's main hope lies in becoming a hi-tech and service-oriented economy. Over the past few years, Taiwan has diversified its trade markets, significantly reducing its share of exports to the US. Taiwan's overseas influence should increase as its exports to Southeast Asia and the mainland grow, and its efforts to develop European markets produce results. Its accession to the WTO, and its desire to become an Asia-Pacific regional operations centre are spurring further economic liberalisation, auguring well for the island's future.