Goethe mentioned Weltliteratur for the first time in 1827, that is to say “World Literature.” From his point of view, it was the modern state of the relationship between diverse national and regional literature: world literature at that time, was one “cultural space,” where exchange was frequent and one author’s work could react to another’s, and vice versa. Goethe used this term to describe the phenomenon of the emerging and rapidly progressing cultural exchange since the development of capitalism. For Goethe, European modernity was as much about the commerce of material goods as it was about cultural exchange. Translation played a major part in this universal exchange market on all levels. The goal of this article is to apply the relationship between world literature and its translation, in the context of Taiwanese literature. The exposure to foreign ideas, the presence of the “Other” and the resulting conflict pushed Taiwan to find itself. Among the products of this exchange is that Taiwanese literature found itself exploring a new genre, an imported genre, namely the novel. The transtextual dance between Taiwanese and foreign literature will be examined under the scope of comparative literature. Moreover, one must understand this background to appreciate the transcultural dimension of Taiwanese literature.