Taiwan-China business ties grow

Much of the credit goes to Taiwanese President Ma Ying-jeou, who has rejected his predecessor's anti-China polices and found a willing partner in the Chinese leadership. Ma has moved to dismantle many of the obstacles that for years let investment and trade flow from Taiwan to the mainland but kept China's money out of the island.

That's setting the stage for a degree of economic integration that seemed unimaginable when Ma took office only a year ago.

Sharing a common language and similar cultures, Taiwanese and Chinese companies are now discussing alliances across a wide array of sectors, including real estate, financial services and even winemaking.

That doesn't mean Beijing and Taipei are anywhere close to unity under the mainland's communist leadership — the ultimate aim of China's Taiwan policy since the two sides split amid civil war in 1949. Polls consistently show about 85 percent of the island's people oppose the idea of communist control. Ma has said that unification talks would not take place during his presidency, which would end in mid-2016 if he is re-elected.

Ma says the moves toward closer economic integration are in the island's best interests, politically and economically. Tensions with China have dropped to their lowest point since the two sides separated 60 years ago, and Taiwan's stock market has surged.

Beginning by lifting the island's ban on regular direct air and maritime service to the mainland, Ma moved on to liberalize conditions for Taiwanese investment on the mainland.

Last month, authorities opened the doors for limited Chinese investment on the island — which until now was largely prohibited. Fresh funds could help stimulate Taiwan's economy, which shrank by a record 10.2 percent in the first quarter from a year earlier.

The most ambitious goal is an “economic cooperation” agreement that will further lower commercial barriers. Negotiations are expected to begin during the second half of this year.

But Taiwan is not opening its economy totally to its neighbor. Officials say China will likely be allowed to invest in the island's computer component industry, but it is keeping its semiconductor, flat panel display and other sectors to itself, fearing the leakage of trade secrets.

Already, Taiwanese officials say they will not permit state-owned China Mobile's bid to acquire a 12 percent stake in Far EasTone Telecommunications Co., apparently because of security issues.

Taiwan will start out cautiously, said Weng Chien, vice president of Taipei-based Polaris Securities Ltd., mindful that China is still committed to bringing the island back into its fold — by force if necessary.

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