TM

iShares Taiwan ETF: A Bet on Improved China Relations

The news is reporting the opposition party has won the elections.

iShares Taiwan ETF: A Bet on Improved China Relations

The recent parliamentary elections in Taiwan provided the China 'friendly' party with a landslide victory; a result which is likely to follow in the March 22nd Presidential elections. Once the new administration takes power they will likely attempt to strengthen ties with China, and Taiwan could begin sharing in China's economic success, from which it has remained mostly isolated. We have bought into EWT a month or two ago and are pleased with the return thus far and think there is a lot of upside. I did a trip to Taiwan recently and the sentiment I got seems to be in general people want whatever it takes to have a stronger economy and more jobs. Bettering ties with China will do this. Right now all trade has to go through a third party between the countries (usually HK). I think if and when direct investment is allowed in Taiwan we will see a strong rally. However, it is important to keep in mind that the 'China Friendly' party isn't running on a platform of reunification, but just on bettering the relationship. Which is a lot better in terms of economic potential than we have seen in the past. Bottom line is I am bullish on the country.

Read more here: fiateconomics.blogspot.../