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China and Taiwan sign historic deal

media Milestone trade pact signed in Chinese city of Chongqing Reuters

China and Taiwan have signed the most sweeping trade agreement ever between the two countries. The move is seen as a step towards reconciliation between the former enemies 60 years after the civil war that drove them apart. The Economic Coooperation Framework Agreement was signed by senior delegates in the Chinese city of Chongqing on Tuesday.


The trade pact will confer preferential tariffs, and in some cases zero tariffs, on 549 Taiwanese products from petrochemicals and auto parts to machinery. The deal covers 16 per cent of the island's total export value to China.

In contrast, only 267 Chinese items, representing 10.5 per cent of China's export value will be placed on a simliar list.

Both governments insist the deal just covers trade, but there are fears it could be a politically dangerous step for the island which has been self-ruled since 1949.

In a show of opposition to the agreement, thousands of protestors marched through the streets of Taipei at the weekend including former president Lee Teng-hui who claimed the deal would 'hurt Taiwan'.

There are also fears over China's military might. Beijing has never renounced its goal of regaining Taiwan, by force if necessary. It has more than 1,000 missiles aimed at the island.

The agreement was described as a 'huge step forward' for the two countries by the head of the Taiwanese delegation, Chiang Pin-kung. It is seen as the culmination of of a Beijing-friendly policy introduced by Taiwan' President Ma Ying-jeou after assuming power in 2008.

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