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The alternation of parties in power leads to policy reversal, especially in a highly

polarized party system; Taiwan is such a case. Taiwan politics has experienced

two party alternations in the past 12 years, and each time its policy toward cross-

Strait relations changed sharply. When the Democratic Progressive Party (DPP)

was in power from 2000 to 2008, the Chen Shui-bian administration took a con-

frontational policy toward Beijing. When the Nationalist Party (KMT) returned to

power in 2008, the Ma Ying-jeou administration reversed the DPP policy and

pursued a more reconciliatory approach toward mainland China. In the last four

years, the two sides of the Taiwan Strait have engaged in substantive dialogues to

improve relations. From May 2008 to March 2012 the Association for Relations

across the Taiwan Strait (ARATS) and Straits Exchange Foundation (SEF ), repre-

senting Beijing and Taipei respectively, have signed 16 agreements on tourism,

public health, food safety, and financial cooperation. Among them a landmark

agreement on economic cooperation, the Economic Cooperation Framework

Agreement (ECFA), was signed in June 2010. The ECFA not only helps to further

liberalize trade and investment across the Strait, but also creates a new spin-off

mechanism – the Cross-Strait Economic Cooperation Committee (CECC), which

brings in government officials from the both sides in direct negotiations.