China and Taiwan have both indicated they are ready to begin negotiations on a trade treaty that may see a similar relationship to the one China holds with the special administrative region of Hong Kong.
In February, Taiwan President Ma Ying-Jeou proposed an Economic Co-operation Framework Agreement, which covered tax reductions, market access, investment and trade, to allow Taiwan to access opportunities between China and the Association of Southeast Asian Nations, after an earlier signing of an economic co-operation agreement between China and ASEAN.
The Taiwanese economy is in recession, projected to decline by four percent in 2009, and Ma hopes a treaty will aid in Taiwan’s recovery. However, many of his constituents fear that trade integration will lead to political integration.
Also on the table is a memorandum of understanding that will link the two countries’ financial systems and allow Chinese investors to buy Taiwanese stocks.
