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China and Taiwan Sign Investment Protection Deal

in International Business

China and Taiwan Sign Investment Protection Deal

China and Taiwan signed an investment protection pact aimed at strengthening cooperation ties between the two nations.

The agreement will allow Taiwanese investors to grow more on the mainland.

The two nations have a bilateral trade worth USD 110bn a year.

Taiwan’s President Ma Ying-Jeou is a big supportive of closer economic ties with China.

However, critics do not find the deal with China very promising, arguing that such moves will result in increasing Chinese influence in Taiwan, and may set the stage for an eventual Chinese political takeover of the island.

“The deals have political purposes and they are steps towards unification. I’m worried about Taiwan’s future if the government sells out to China like this,” said a protestor.

China and Taiwan, while in practice maintaining a fragile “status quo” relationship, periodically grow impatient with the diplomatic patchwork that has kept the island separate from the Communist mainland since 1949.  After losing the civil war to Communist Chinese and fleeing to Taiwan in 1949, the nationalist Kuomintang (KMT) leaders of the Republic of China regarded the Communist Chinese government as illegitimate, claiming the mainland as rightfully their own. Beijing, in turn, regards Taiwan as a renegade province, and has tried repeatedly to persuade the island to negotiate a return to the fold. The KMT returned to power in 2008 after being in opposition for eight years. During this time President Chen Shui-bian and his Democratic Progressive Party (DPP) had engaged in policy that widely departed from the KMT, invigorating efforts to seek Taiwan’s sovereignty. Current President Ma Ying-jeou takes a decidedly more conciliatory approach; shortly after taking office he declared a “diplomatic truce” with China. Since then, Taiwan’s relations with the mainland have improved.



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