In concrete terms, the Economic Cooperation Framework Agreement signed by Chinese and Taiwanese representatives ends tariffs on hundreds of products traded across the Taiwan Strait. It also will allow Taiwanese firms to invest in Chinese service sectors, including banking accounting, insurance and hospitals.
The deal benefits both sides said Chen Yunlin, the head of China's Association for Relations across the Taiwan Straits. Chen descriibed the deal as one of "understanding, conciliation and goodwill" that defines the spirit of economic cooperation across the 160-kilometer Taiwan Strait.
The head of Taiwan's Straits Exchange Foundation, Chiang Pin-Kung, also said the deal will be mutually beneficial, adding it is a landmark in China-Taiwan economic ties. Chiang said the deal will create what he describes as a win-win situation, creating a "more orderly economic environment" for both governments.
Two-way cross-Strait trade is about $100-billion, annually.
Ya-chung Chang, an international relations professor at National Taiwan University called the pact a first step that he hopes also will lead to greater interaction in other spheres. Apart from the economic aspect, Chang said, Taiwan should communicate more with Chinese society to promote cultural and political dialogue, to encourage China to become what he described as an "open society."
The Chinese Nationalists fled to Taiwan in 1949, after losing a civil war to the Communists. Beijing considers the democratically-governed island part of Chinese territory and has not dropped its vow to reunify it by force, if necessary.
Tens of thousands of people in Taiwan took part in a protest demonstration against the trade deal, Saturday. Critics fear China will overwhelm the island.
The agreement was signed in the southwestern Chinese city, Chongqing, which has historical significance because it was the Nationalist capital shortly before the Nationalists fled to Taiwan.