Buy Taiwan Stocks!

Unstable political arena in Taiwan and dire economic outlook in America dragged the Taiwan stock market down in the beginning of the new year. Last year, Taiwan stock index run like a roller coaster, just as dazzling as the Shanghai index. But people are too shocked by the crazy "Chinese small investor", and the "infected" Hong Kong market, they forgot Taiwan had a wonderful ride before. This quarter, I believe, for long term investors there will be a golden opportunity. Taiwan's strength is consumer electronics and if you look at the fundamentals, they remain strong. If we learned something from yesterday's Taiwan election, that would be "it's the economy, stupid!" Well, apparently, Chen "local" forgot there is something called "global" and obviously, going global for Taiwan means openning up to the Mainland. Now with the KMT holding the majority in the TW legislative Yuan and a very possible KMT president making policies in the office 68 days from now, we should expect that many agreements made between the CCP and the KMT will be honored gradually. Direct flight, tourism, CEPA, and incoming investment can be flooding in within 2 years. After presidential election, we may expect 4 years relative stable political management, and it will be a great opportunity for Taiwan to reinvest in education, health care, infrastructure, and international competitiveness. Friendly cross strait relations may benefit Taiwan business in terms of bigger market, more contracts, and better treatment, which will help Taiwan companies to fend off the impact of the U.S. recession. Besides, current Taiwan stock average PE ratio is about 1/3-1/4 that of the mainland A shares, and as attractive (maybe even better) as the Hong Kong ones. In any case, Taiwan people spoke and democracy consolidated. Finally, there's some light.

Suggestions to the American government: be a better broker, make a clear stand and push two sides to sit down, talk, and make progress, create a regional security mechanism to maintain peace and stability but leave cross strait negotiation to the Chinese alone.
Suggestions to the Chinese governement: enlarge beneficial package to the Taiwanese, find a way to allow Taiwan to participate in more non-sovereign international organizations, give the opportunity to Taiwan elites and allow them to work as professionals in international organizations as well as in mainland China, exchange democratic election experience on the village level and health care system, cooperate on environment, technology, and any possible area.