China's trade with Taiwan has a political motive: winning the hearts and minds of the Taiwanese people. The effectiveness of China's economic statecraft can be examined in the Syuejia (Xuejia) case, where Taiwan put up strong resistance to the generous benefits offered by China. This article investigates the political implications of the Chinese-designed contract farming programme in Syuejia and argues that if economic favours are delivered, and positive impressions also created, political attitudes can be revised. Without these two prerequisites, however, replicating the Syuejia results elsewhere and thus disturbing the cross-Strait status quo will be difficult. When put in a theoretical context, the changes in the political landscape of Syuejia illustrate the interplay of economic interests and political identity.
