In the shadow of Beijing?

Taiwan's development as a regional economic power is being influenced by its strained relations with China. Its increasing democratization in recent years has made its attitude towards China more realistic, with the Taipei government now acknowledging the legitimacy of the Beijing regime and adopting a policy that recognizes China as a divided nation and supports efforts toward some degree of reunification. However, Taiwan continues to impose the 1949 prohibition against direct commerce, transportation and communication with the mainland. Although Taiwenese businesses have been calling for the lifting of this ban so that the island could be transformed into a business center for China, the government refuses to do so because the move would look like a face-losing concession to Beijing and would undermine its policy of cautious engagement.