A historic meeting between China and Taiwan to discuss cross-strait transport links may have big implications for the countries and their exchange traded funds (ETFs).
It’s the highest-level meeting since the countries split in 1949, reports the BBC. Taiwan’s new president, Ma Ying-jeou, has made calls for a new "chapter of peace." He’s committed to easing tensions in the country and has promised to reverse the policy of emphasizing political separateness from the country.
The meeting was between Nationalist Party Chairman Wu Poh-hsiung and Chinese President Hu Jintao.
Hu expressed gratitude for the aid Taiwan provided after China’s earthquake, while Wu said the two countries should work to ensure they never take up arms against one another again.
On the agenda was establishing cross-strait flights and allowing more Chinese tourists into Taiwan. Lisa Chow for Marketplace reports that currently, travelers heading to Taiwan from China have to stop in Hong Kong – a huge nuisance for business travelers.
If China and Taiwan can continue moving forward in their relationship, both economies could benefit. In turn, their related ETFs could reap the rewards as well.
The iShares MSCI Taiwan Index (EWT) is up 8.3% year-to-date. China’s ETFs could use the lift, as they’ve fallen off from their 2007 performance. They’ve rebounded somewhat so far this year, however.
- SPDR S&P China (GXC), down 14.5% year-to-date
- iShares FTSE/Xinhua China 25 (FXI), down 11.9% year-to-date
- NETS Hang Seng China Enterprises Index Fund (SNO), launched on May 22
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.