This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

China Watch: Slowed China-Taiwan Trade Talks Have Investors on Hold

NEW YORK (TheStreet) -- It was supposed to be a red-letter year for China's economic engagement with Taiwan.

The island's most China-friendly president in history had won re-election, and both sides followed this event by pledging to tear down more trade and investment barriers as a prelude to any political agreements between the two old enemies.

But red flags are beginning to fly instead. Although both sides wax optimistic about more agreements in the pipeline, momentum has at least slowed on deals that would cut import tariffs and allow more investment in Taiwan from the other side.

The slowdown could be just a pause as China grapples with its own leadership transition later this year, but it could portend something chillier, such as China demanding political concessions that Taiwan doesn't want to give.

For now, the small number of companies in China and Taiwan that have gained from earlier trade deals is waiting for the next move.

So are some major publicly traded companies in Europe and the U.S. that see profits from the trend of warmer China-Taiwan relations but need reassurances that trend will continue.

Negotiators from the two sides are supposed to meet in Taipei before the end of June. Yet no date has been set, and their skeletal agenda covers investor protection accords, but nothing that actually rips down barriers.

The barriers were built very high before 2008, when Taiwan was talking about de jure independence from China to consummate about six decades of self-rule. China claims sovereignty over Taiwan and had threatened to use force if Taiwan veered too far toward legal independence.

After 2008, with sabers dropped, Taiwan's incumbent president turned icy relations into a sudden flow of trade, transit and economic deals. His government has gradually let mainland Chinese firms buy shares on the Taiwan Stock Exchange and make direct investment in Taiwanese companies. The two sides also opened 558 direct flights and allowed millions of mainland tourists to visit the island just 100 miles away.

Those deals steadied Taiwan's China Airlines (2610.TW) and EVA Airways (2618.TW) as China flights suddenly went from zero to 10% of their business.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,039.49 +60.36 0.36%
S&P 500 1,992.37 +5.86 0.30%
NASDAQ 4,532.1040 +5.6220 0.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs