This morning’s news blast featured two unique tidbits of information purposely positioned in succession. The first, that President Ma Ying-jeou of Taiwan announced that Chinese officials had dropped their objections to Taiwan’s participation as an observer at a United Nations body, a step forward in Taiwan’s effort to win greater international recognition. The second, that  Taiwan’s third-largest telecoms service provider, Far EasTone Telecommunications Co. laterannounced that it plans to sell a 12% stake to China Mobile Ltd. for $528 million, — the largest cross-strait business deal in over 60 years. The two sides of the Taiwan Strait moved a further step closer to normalizing their trade and economic relations after reaching understandings on financial cooperation and opening Taiwan to Chinese investment.

The stories’ placement and indeed their goings-on are no coincidence. It seems China is living up to its new reputation as geopolitical superpower in decreasing its own political risk and seeking economic opportunity in regions once politically a no-go for integration. 

The achievement, together with agreements reached previously on the launch of cross-strait air, shipping and mail services, has contributed to an initial realization of “three links” - direct transportation, trade and postal links - between the two sides, said Chiang Pin-kung, chairman of the Taipei-based Straits Exchange Foundation (SEF).

Historically, the tensions between China and Taiwan find their roots in the 1949 Chinese revolution, when communists led by Chairman Mao claimed control of the mainland. Nationalist leader Chiang Kai-shek withdrew to Taiwan, with two million refugees, vowing the reclaim the mainland.

During the 1960s some native Taiwanese, upset by the rule of the mainland minority, began to call for independence from China. It was during this time that focus shifted from reclaiming the mainland to developing the island itself.

In 1997, as Britain prepared to return control of Hong Kong to China, Taiwan conducted live military exercises in the Straits. Experts said it was to demostrate that Taiwan would not quiretly follow the Hong Kong example.  In 1999, then-President Lee announced that Taiwan enjoyed a “special state-to-state relationship” with China. This statement of implied state sovereignty angered Beijing. Taipei backed away from the position, but talks between the two leaderships were cut off.

Indeed communique was reformed and crucial steps in cooperation for both Asian nations have truly been made. Likewise to the United States loosening policy with Cuba to strengthen economic ties in the Americas, so too is the gesture of dropping objections to Taiwan’s participance at the UN a phenomenal practice for both political and corporate foreign policy.

Stronger cooperation was immediately noted in the cross-strait business deal recently announced. Taiwan’s key Taiex stock index jumped 6.7 percent yesterday, the most in almost 18 years. The island, though mired in a recession after the economy contracted by a record in the fourth quarter because of evaporating global demand for its semiconductors and flat-panel televisions, “ is well-positioned to benefit from the improving cross-strait ties, especially with China expected to come back robustly from this economic crisis,” said Prakash Sakpal, an economist at ING Bank NV in Singapore. “Demand from China will be a good buffer.”

Due to the decrease in political risk and an increase in state-to-state dialogue, both domestic and foreign investors can simply imagine the opportunities that lay in waiting between China and Taiwan. A demanding Taiwanese market with a larger spoon in to China, and a China that sees a place at the table for Taiwan.