TAIPEI (TheStreet) -- A blockade of Taiwan's parliament and clashes between protesters and police Monday threaten passage of a trade pact that would open the investment-hungry island to investments from the economic powerhouse of China.
Banks, tour operators and health care firms from the world's 26th largest economy must wait indefinitely -- likely until at least August -- for ratification of a China-Taiwan deal that would liberalize the service sector.
The deal was signed in June with ratification expected by the end of 2013, but postponed because of disputes in parliament. The fresh delay this month has already disappointed markets, with Taiwan's financial and insurance sub-index down 2% since Wednesday.
"In the short term, share prices are going to be affected," says Shih Hsiao-chi, economist at SinoPac Securities in Taipei. "If this situation at the legislature keeps going on goes on, share prices will be more heavily affected and foreign investors will start to waver."
The trade pact would open 80 service categories in China and 64 in Taiwan, allowing Taiwanese firms to expand into their biggest market, where two-way trade surpassed $100 billion for the first time in 2010.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV