There were further movement in the already rapid development of economic links between Taiwan and mainland China in Q408, which had both geopolitical and domestic implications.

December saw agreements on direct flights between the two countries, and Chinese citizens can now send mail directly to Taiwan. In March, Taiwan's Cabinet also revised regulations controlling China visits by government employees and private individuals, greatly relaxing travel restrictions on high-ranking officials. The reform also will ease restrictions on mainlanders who wish to visit Taiwan. Such trips may be for either business or pleasure, but the government has maintained some restrictions on civil servants who are deemed to have access to state secrets. The government hopes that the facilitation of exchanges between the two countries will aid in promoting a deeper understanding on both sides, and contribute to establishing healthier relations on both sides of the Taiwan Strait.

The most significant signal of warming ties, however, came on December 18, when a mainland official said that Beijing may allow Taiwan to join international bodies, including the World Health Organisation, after a series of talks. Taiwan’s President Ma has dropped the country’s annual bid for representation, and continues to face opposition to the thawing of relations with China on his stated basis of ‘three nos’: no unification, no independence and no use of force.

Ma has confirmed his commitment to maintaining Taiwan’s defence forces, while continuing political and economic reforms, although opposition to increasing rapprochement with mainland China continues.

Nevertheless, in March, 2009, the Ministry of National Defence (MND), in its 2009 Quadrennial Defence Review, has proposed streamlining the military hierarchy by combining the current six-tier general military command into three – army, navy and air force – and reducing the nation's 275,000 troops to 215,000 over the next four years.

Taiwan is moving to fully professionalise its military forces by phasing out over the next five years the conscription of young men. This process will see each year a ten per cent reduction of conscripts and its cessation by 2014. However, the government will still require its citizens to undertake a four-month military training program (perhaps to comply with the country's constitution) and require these trained men to be on standby, should circumstances require their mobilisation.