China -Taiwan ties

On January 12th, the KMT of Taiwan i.e. the nationalists, won the parliamentary elections as the ruling Democratic Progressive Party managed to win just 27 seats while the KMT grabbed 81 seats ( there were in total 113 seats). Their victory means that relations between Taiwan and China are likely to improve, given the fact that the DPP was more pro-independence and more willing to unease relations with the “mainland”, while the KMT looks forward to warming relations with China particularly in terms of maintaining strong economic ties.
Two important factors, which may have brought victory for the nationalists, are that, firstly, on Dec 28, the high-court cleared the KMT's presidential candidate Ma Ying-jeou, of alleged corruption charges, thereby uplifting his image. Secondly, the corruption charges encircling the DPP's president Chen Shui-bian and his associates plus the fact that they failed to handle the economy and his plan to hold a controversial referendum on applying to the UN under the name of Taiwan, raised concerns among voters. Now, all eyes will be on the presidential elections-- to be held in Marchwhere Mr. Ma will run against Frank Hsieh of the DPP. At the moment, the KMT looks to be the favourite and if they do win, than relations with the mainland will gain an impetus.
China is Taiwan's largest export market and Taiwanese firms have also invested huge sums on businesses in China. Mr. Ma promises to allow direct travel links with China and says he will allow Taiwanese firms to invest more than 40% of their assets in China. He also looks forward to signing a formal peace agreement and thereby smoothening cross-Strait tensions with China. But he has said that he will only opt for reunification with a “democratic” China.