With the election of Ma Ying-jeou as Taiwan’s new president, Taiwan’s stock and currency surged. Ma Ying-jeou has promised to have closer political and economic ties with China and to boost domestic spending.
By promising direct flights to China within two months, Ma Ying-jeou has provided an immediate boost to the domestic airline industry. With this continued integration with China, Taiwan’s dollar will begin to appreciate against other world currencies and specifically against the U.S. dollar.
Opening up to China may not insulate Taiwan from the current global slow down in the short run, but this is a long term boom for Taiwan.