March 20 (Bloomberg) -- Jim Rogers, co-founder with George Soros of the Quantum Hedge Fund, is investing in Taiwan on expectations this week's elections will install a government favorable to closer ties with China.

Rogers, 65, is buying exchange-traded funds tied to Taiwan, where in two days voters head to the polls to elect a new president. The opposition Kuomintang's Ma Ying-jeou and the ruling Democratic Progressive Party's Frank Hsieh both favor closer links with China, which is officially at war with Taiwan.

``Both of them are going to bring peace,'' Rogers, chairman of Rogers Holdings, said in an interview yesterday in Singapore. ``It's ultimately going to be a merger of Taiwan and China, the currencies are going to merge, the economies are going to merge, it's all coming.''

Taiwan has restricted direct shipping, air and postal links with the mainland since the KMT retreated to the island in 1949 after losing a civil war in China to the Communist Party.

China has offered to discuss peace with any Taiwanese party that rejects independence, while maintaining a threat to invade if a formal split is attempted. Chinese Premier Wen Jiabao said this week he's ``hopeful'' talks with Taiwan can resume, and will pursue direct trade, postal, and air and shipping links.

To contact the reporter on this story: Liza Lin in Singapore at llin15@bloomberg.net.

Last Updated: March 19, 2008 22:08 EDT