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China-Taiwan

In early 2009, the Ma administration in Taipei and the Chinese government in Beijing began seriously discussing the possibility of signing a free trade agreement between the two. The stakes are quite large and so is the controversy around any such deal. Ever since 1949, when nationalists fled the mainland, China considers Taiwan a breakaway province that should fall under Beijing’s rule. Taiwan, on the other hand, has been trying to build and maintain its autonomy as a sovereign democratic state. Military tensions have surrounded this antagonistic relationship for 60 years, while China has been quite successful in asserting its "one China" policy among the world’s governments and alienating Taiwan diplomatically.

The new urge to sign an FTA comes after the nationalists lost power in Taiwan’s 2008 elections. China is, in fact, Taiwan’s top trading partner. Taiwanese businesses have built up strong investments in the mainland and the island’s political leadership is particularly concerned about losing economic strength in Asia once the China-ASEAN FTA starts coming into force in 2010.

The big question is whether a China-Taiwan FTA would trigger the start of Taiwan’s transition toward effective economic and political control by Beijing ("reunification"). In this regard, people have even been fighting over the possible name of the FTA. Taiwanese opposition forces insist that it should not be called a Comprehensive Economic Partnership Agreement, as originally proposed, because that is what China’s FTAs with Macao and Hong Kong are called. (Therefore, calling it a CEPA would insinuate that Taiwan has the same political status as these two special administrative regions of China.)

In June 2010, the governments of China and Taiwan signed an Economic Cooperation Framework Agreement (ECFA) which took effect in September 2010. The two governments intend to complete negotiations under this agreement by 2014. There have been major protests and much criticism of the deal in Taiwan.

last update: May 2012
Photo: WaDaNaBe / CC BY-NC-SA 2.0


Taiwan and China: Reunification by trade?
Free-trade agreements are often contentious but rarely would one have as much strategic significance as that proposed between China and Taiwan.
Lu makes case for FTAs with regional countries
Taiwan’s former vice president said that the KMT and CCP are plotting a “3-3-3” scheme that includes an ECFA, confidence-building and a peace treaty by 2011
Chinese FTA better than ECFA: forum
The administration of President Ma Ying-jeou should ask Beijing to sign a free trade agreement under the framework of the WTO, rather than seeking to ink an economic cooperation framework agreement under the “one China” principle, participants at an economic forum said yesterday.
Taiwan, China aim to sign FTA-like deal in 2010
Taiwan and China could sign a free-trade style agreement later than expected, a top Taiwanese official for cross-strait affairs said. His comments prompted the island’s stock market to drop sharply on Monday.
Cross-Strait matrix: The Economic Cooperation Framework Agreement
The possibility of China and Taiwan reaching a formal free trade agreement in 2009 or later depends on complex bilateral (i.e. China and Taiwan), triangular (i.e. China, Taiwan and the United State), multilateral (e.g. ASEAN, WTO), and even global forces (e.g. the global recession and the G-20 response).
Mainland expects to start talk on cross-Strait economic pact
The Chinese mainland expects talks about a cross-Strait economic cooperation agreement to start in the latter half of this year, said President Hu Jintao Tuesday.
Taiwan wants to sign trade pact with China as soon as possible
Taiwan President Ma Ying-jeou on Sunday urged China to sign a trade pact with Taiwan as soon as possible, despite objection from Taiwan’s opposition party DPP.
Sit-in is start of new democratic movement: Tsai
Taiwan’s Democratic Progressive Party Chairwoman Tsai Ing-wen announced that her party would launch a drive to collect one million signatures for a national citizen referendum on the Kuomintang government’s plan to sign an economic cooperation agreement with China and declared that the end of a 24-hour sit-in in front of the presidential office marked "the beginning of a second democratic reform movement."
Taiwan’s DPP vows to launch referendum on China trade deal
The leader of Taiwan’s pro-independence Democratic Progressive Party (DPP) on Monday vowed to launch a referendum in a bid to stop the signing of a major trade pact with rival China.
Chinese officials urges mainland businesses to invest in Taiwan, plan purchasing mission
China has outlined plans for encouraging mainland Chinese businesses to expand their investments in Taiwan, and has scheduled several purchasing missions to buy food and consumer products.