This paper uses the perspective of the political economy of scale to depict the contesting issue in Taiwan regarding the dilemma of political rivalry vs. economic integration across the Taiwan Strait. By using the case of the spatial restructuring of the ICT industry -its embedded and dis-embedded in Taiwan, as well as its re-embedded in China, this paper intends to analyze the Taiwanese state's reaction and its spatial strategies. It will show that the state's reaction has been self-contradictory-on the one hand, the national/populist project intends to bring the runaway economy under its control, while on the other hand the glocal state strategy aims to embrace the globalization tendency. This paper contents that the state's national/populist project overrules the glocal state strategy, as a result the ICT industry has become re-embedded in China even further as the contesting of scale continues.