Just about anywhere Taiwan President Ma Ying-jeou goes these days, he ends up talking about China. On a Saturday morning in early May, Ma, casually clad in a red polo shirt and blue jeans, is marketing Taiwan as a tourist destination to foreign diplomats at a restaurant perched on a forested hillside in the county of Hualien on the island's east coast. The government, he tells them, is upgrading bike trails in the area and hopes to get World Heritage Site status for a nearby gorge, which Ma compares to the Grand Canyon. The diplomats chat about the local hotels and scenic spots for a few moments, but then quickly shift the conversation to what is really on everyone's mind: Taiwan's rapidly warming relations with China. (Read "China and Taiwan Draw Closer, Amid Protests.")
Ma, 58, seems only too happy to dive into the issue that has dominated his first year as Taiwan's leader. Tourists from the Chinese mainland were allowed to visit Taiwan for the first time last year and are arriving by the thousands each day, he notes, giving the recession-hit local economy a welcome, albeit minor, boost. He stresses that he wants Taiwan to benefit economically from better ties with China but he won't let the island be assimilated by the rising giant. "I won't sell out Taiwan," Ma told TIME, adding that "I'll sell China Taiwan fruit ... We're trying to create an atmosphere of peace." (See the world's most influential people of 2008.)
Ma has already done more to close ranks with China than anyone in Taiwan's brief history. Ever since Ma's political party, the Kuomintang, fled mainland China to Taiwan after losing a civil war to Mao's communists in 1949, relations between the two have been antagonistic at best. Beijing treats Taiwan as a runaway province and has blocked the democratic Taipei government from receiving diplomatic recognition or participating in many international forums. Both sides armed the Taiwan Strait to the teeth, turning it into one of Asia's most dangerous military flash points. Contact between them has been grossly restricted. A year ago, Taiwan residents couldn't take a scheduled flight or mail a letter directly to the mainland, and Taiwan-made goods had to be trans-shipped through Hong Kong and Japan.
This has begun to change under Ma, who shortly after taking office established what he calls the "three links": direct shipping, air travel and mail service. In late April, the two sides agreed to more than double the number of weekly direct flights to 270. Ma has also eased limitations on investment by Taiwan companies in China, and his administration recently announced that, for the first time, mainland investments would be allowed in a broad range of Taiwan manufacturing and services companies. China Mobile, the mainland's largest cellular-service provider, has already agreed to invest about $530 million in Taiwan's Far EasTone Telecommunications, although the landmark deal has not been approved by Taipei. In perhaps the most hopeful sign of change, China recently relaxed its longstanding opposition to Taiwan's inclusion in international organizations. After being rejected since 1997, Taiwan was finally invited this year to be an observer at the World Health Assembly, the governing body of the World Health Organization the first time it has participated in a U.N.-related forum since Taiwan lost its U.N. seat to China in 1971. China-Taiwan relations "are now on the right track," Ma says.