The China-Taiwan issue might be resolved once and for all in 2011 — not with political prowess but financial muscle, according to one manager's predictions for 2011.
Chris Ruffle, a portfolio manager at Martin Currie Investment Management Ltd., declared “China buys Taiwan” in his investment outlook for the new year, according to a client memorandum issued this month. Described as “the last foothold of the old nationalist government” in his analysis, Taiwan's territorial independence is not recognized by China. The mainland's claim to Taiwan has been the crux for much of the political tension between the two nations.
However, relations between the two have been thawing on the economic front since the 2008 elections, which ushered in a new Taiwanese government that's more receptive to Chinese investments.
Mr. Ruffle — who is based in Shanghai and manages several of the firm's China and Taiwan strategies — said major restrictions on Chinese investors in Taiwan likely will be lifted next year, enabling Taiwan to benefit from an influx of capital from the mainland. Real estate companies in Taipei, Taiwan's capital, will particularly benefit in the short term.
“Money talks better than Beijing's cocktail of threats and appeals for patriotic unity,” Mr. Ruffle wrote. “If only all political standoffs could be resolved so easily.”