Money makes the world go ’round.

China and Taiwan are one of the best examples of where trade and cash flow trumps decades of diplomatic and political opposition. Taiwan as a country began in 1949 after the communist revolution in mainland China. Chiang Kai-shek, having been ousted from China as an American puppet and leader of the opposition party, Republic Of China, fed to Taiwan. While there he established the Free Republic of China and claimed that all of mainland China should be under the control of the FROC. Thus began the split of China and Taiwan which still exists to this day. However contentious this split, it has not stopped the two nations from trading with each other. China and Taiwan have had small but rewarding trade relations throughout the 1900s but trade exploded between he two when both nations joined the World Trade Organization in 2001. From 1991 to 2007 trade between the two nations had jumped from $8b a year to $102b a year. Flights per week between the two countries had also doubled in that period.

In more recent years a trade agreement between China and Taiwan has been reached but not yet ratified by the Taiwanese legislature. The Cross Strait Service Trade Agreement of 2013, otherwise known as CSSTA would further open both China’s and Taiwan’s economies to the other’s business and enterprise. Among other things, the CSSTA will open Chinese and Taiwanese banks and creditors to each other’s countries, meaning China can invest in Taiwan and vice versa. This is a huge step because the countries had limited financial interaction in this fashion.

While many in both countries think the trade agreement is mutually beneficial, some find it to be too one sided in favor of China. with over 70% of Taiwan’s GDP coming from its service sector, the ability of huge Chinese government backed and owned companies to operate within Taiwan inspires fear of competition that the Taiwanese cannot compete with. This fear has such a strong grasp on the people of Taiwan that there have been huge protests against the CSSTA. The protests have been successful in creating doubt within the Taiwanese government which has delayed the agreement.


One thought on “Money makes the world go ’round.

  1. The relationship between China and Taiwan is really interesting, and may have a huge influence on the economic sphere in the East Asia. As the authore in this article says, many people, especially students, opposed to Ma Ying-jeou (馬英九), the top of the Nationalist govenment on Taiwan, and occupied the Legislative Yuan (the Sunflower Student Movement). This was one of the big reasons why the Democratic progressive Party got much more supports in the Taiwanese local elections, 2014. I think it is one example the leader lost the winning coalition, paying less attention to the opinion of citizens.


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