ChiWan

So this story didn't even make it to the front page of google news, but I think it will soon have some world-wide impacts. Mainland China and Taiwan have just signed some landmark trade agreements. As of 1 hour ago, people in mainland China can send direct mail to Taiwan and later today the first direct passenger flights will commence and direct sea travel will again be permitted. All of this is the stuff of history since none of this has been permitted since 1949. To transport cargo from the Mainland to Taiwan will now take less than 1/3 of the distance and time because no artificial detour will be necessary. Add this to the trade agreements signed earlier in the fall effectively removing various tariffs and quotas on trade between these 2 entities, and I think the picture is becoming clearer...China and Taiwan will very soon be One again, in practical effect if not officially (there are some who think this won't happen, such as the 0.5 million protesters in Taiwan who opposed Chen Yulin's visit to Taiwan last month). When I was in Macro Economics class back in 2001, our teacher was telling us that at around the year 2020, China's economy is projected to become the largest in the world. I think it will happen much quicker. China has successfully pulled off the Olympics this summer, last month sent men to space, has just effectively normalized relations with Taiwan and the Shanghai World Expo in 2010 is another grand project in the pipeline http://en.expo2010china.com/ expecting 70 Million visitors and the participation of 228 countries. If you consider the GDP alone, China is neck and neck with Germany and behind the US and Japan. If you look at the PPP and consider the perpetuated undervaluation of the RMB (Yuan) b/c it is still being pegged to the dollar (even though a fraction of its valuation is permitted to float), the size of the economy may already be number 2 in the world (even considering the 2007 World Bank PPP revisions). Also if you consider this headline from today about the official 2nd largest economy: http://www.bloomberg.com/apps/news?pid=20601068&sid=auPaBwMwwGtg&refer=home (Sentiment among Japan’s largest manufacturers fell the most in 34 years, signaling companies are likely to cancel spending plans and cut more jobs, pushing the economy further into recession.) and any headline from the US, and then note that China appears to be the only large economy not headed into a recession, and it began aggressive spending on massive infrastructure improvements earlier this year, before the bank collapses even began...and then the expected benefits of massively improved trade relations with Taiwan (and perhaps eventual unification)...and I think the U.S. and the World has a big wake up call.