What’s Good

  • Taiwan is the world’s 17th largest economy, the 14th largest exporter and the 16th largest importer
  • Taiwan has the fourth-largest information hardware and semiconductor industry in the world and they are known for high-quality, innovative products

The Latest News

China and Taiwan have long been adversaries, but in recent months, observers have been noticing some small shifts in the countries’ attitudes toward one another. Those who have been eyeing the relationship between the two nations are especially excited about a key invitation Taiwan received.
The World Health Organization (WHO) invited Taiwan to the World Health Assembly (WHA) as an observer; that China is allowing Taiwan to attend such a major meeting is seen as a big concession toward the country. Especially after it elected Ma Ying-jeou, who is seen as more diplomatic than the previous president, Chen Shui-bian. Chen has been said to have been more interested in further antagonizing China than establishing a working relationship.

The WHA invitation caught the attention of investors because it’s seen as China finally giving Taiwan a little breathing room – something the country has wanted and needed for decades.

But the invitation was just the icing on the cake of several other positive developments in the relationship between the two:

  • Tourism between the two countries has jumped, as China has added hundreds of flights between the two countries
  • China has also sent pandas to the Taipei zoo in a show of diplomacy
  • Recently, China and Taiwan met to put together some agreements that could lead to a flood of investment in financial services to flow across the Taiwan Strait

iShares MSCI Taiwan (EWT) is up 42.5% year-to-date