This paper aims to investigate the possible framework for encouraging the presence of local dimensions in an internationalised and globally competitive system by using Taiwan's higher education system as a case. It begins by discussing the notion of internationalisation and its implications for higher education. It then turns to look at Taiwan's responses to these global developments. It also reviews different opinions on the position and importance of local dimensions in the world of globalised higher education. Based on these perspectives, the paper advocates promoting the concept of state-building in Taiwan's as well as in other higher education systems for preserving or even strengthening the local dimensions of individual academic systems operating in the international knowledge network.