This paper is adapted from essays written for the Britannica Book of the Year-1988. In it, the author reviews key political, economic, and foreign policy developments in China and Taiwan during 1987. In the case of China, he notes that two interrelated processes dominated Chinese politics in 1987: resolving the succession arrangements for the country's aged revolutionary-era leaders, and sustaining efforts at economic and political reform. China's relations with Vietnam and India were the two major exceptions to Beijing's successes in improving relations with its neighbors. In Taiwan, 1987 was a year of extraordinary accomplishment. Major political reforms, including the lifting of martial law, and remarkable economic performance fostered growing confidence and stability. While Taiwan continued to reject any official contact with leaders on the mainland, unofficial dealings became more flexible and included changes in travel restrictions, allowing Taiwan citizens other than military and government personnel to visit the mainland.