| |
Taiwan re-evaluates direct
transport links
By Jamie Miyazaki
The pro-independence agenda of Taiwanese
president Chen Shui-bian and his Democratic Progressive
Party (DPP) have never gone down well in Beijing's
corridors of power. While cross-Strait political
relations have been in suspended animation ever since
Chen's inauguration in 2000, economic links seem to be
strengthening ever more rapidly.
Discussions
about China-Taiwan economic relations tend to center on
the ban on the "three links" - direct transport, trade
and postal links. Chen's proposals last week on lifting
the ban on direct transport links by the end of next
year were thus noteworthy. The DPP is not noted for its
support of closer economic links with Beijing.
With his eye on next March's presidential
elections, Chen's proposals are more to do with
electoral maneuvering than heralding a thaw in
cross-Strait relations. Facing an unusually united
opposition and a lackluster track record in office, Chen
looks set for a tough battle. Promises of reassessing
direct transport links are a good way of appealing to
the business community, which has long lobbied for
re-establishing the three links.
What is
noteworthy is Chen's and a recent government report's
focus on the issue of direct transport links as opposed
to the broader three-links issue. The "three links" are
in effect an artificial distinction - once direct
transport links were established, trade and postal links
would inevitably follow. Moreover, prohibition of direct
transport links has been continuously eroding. January
saw the arrival of the first Taiwanese commercial flight
on mainland soil since 1949 for the Chinese New Year.
Ferries already link the offshore Taiwanese islands of
Matsu and Kinmen with Fujian province on the mainland.
Considering how ineffective the three links have been at
discouraging Taiwanese firms from investing in the
mainland, a reassessment of their efficacy by Taipei is
long overdue, even if it is motivated by hopes for
electoral gain.
It is apparent that restrictions
on direct transport links increase costs for Taiwanese
firms operating in mainland China. Less clear is how
much these costs would be reduced if direct links were
established, as this is dependant on the number of
points of entry on both sides and the number of firms
cleared to operate on the routes. Chen envisages a
three-phase timetable leading finally to full direct
transport links.
Taiwanese firms based out of
Shanghai would be the biggest winners. However, even for
Guangdong-based firms the savings on transshipment fees
levied by Hong Kong alone could total about NT$750
billion (US$22 billion) per annum, according to Day
Sheng-tung, chairman of Taiwan's National Association
for Small and Medium Enterprises. The port of Kaohsiung
would also receive a welcome boost from direct transport
links. Largely because of the ban it has become
increasingly sidelined by Hong Kong and Shanghai as a
shipping hub.
The impact of direct
Shanghai-Taipei flights would be even greater. About
half a million Taiwanese live in Shanghai, making the
Shanghai-Hong Kong-Taipei route one of the most
profitable and busiest air routes in Asia. The current
journey time of nearly six hours via Hong Kong would be
slashed to just 90 minutes. This not only would have
obvious benefits from a time perspective but there would
also be a number of other important effects. It would
allow regular cross-Strait commuting for senior
Taiwanese management. Currently they must relocate to
the mainland to oversee their mainland operations; this
has aggravated perceptions of a brain-drain from Taiwan
to China - especially in the important
information-technology (IT) research and development
(R&D) sector.
Direct transport links would
presumably also work both ways, allowing mainland
Chinese to travel to Taiwan far more easily. This would
be welcomed by Taiwanese firms as it would allow them to
expose mainland staff to Taiwanese corporate culture
more easily. However, the biggest impact would be on
Taiwan's tourism industry, as the recent relaxing of
Chinese regulation on individual tourist trips to Hong
Kong has shown with its huge boom in mainland visitors.
Yet many Taiwanese remain skeptical, fearing
that direct transport links would open the floodgates to
a hollowing-out of Taiwanese industry to the mainland
and as first steps in Beijing's aim of reunification. As
former Taiwanese president Lee Teng-hui thundered
recently, "If we keep strengthening the economic ties
and integration between Taiwan and China ... this nation
will slump." Chen therefore has gone out of his way to
paint cross-Strait ties as "one country on either side
of the Strait" as opposed to Beijing's "one China"
mantra.
The "hollowing out" fear is palpable in
Taiwan with Beijing's shift from a military
reunification strategy to one by economic integration.
Hollowing-out has hit Taiwan's service and financial
industry far harder than manufacturing, generally
perceived as the phenomenon's main victim. Ironically,
this has been principally due to the ban on direct
links. Taiwan's banks are prevented from providing
financial services to Taiwanese firms' mainland
operations, depriving them of a huge source of revenue
and aggravating the woeful state of their balance
sheets. Direct transport links would put pressure on
Taipei to reassess the lack of direct financial links
and potentially open up new markets for them.
Manufacturing's wholesale exodus from Taiwan to
mainland China would also be unlikely with the
establishment of direct transport links. More likely is
the consolidation in division of labor between the two
sides that is already under way. Taiwan's information
technology industry is a good example of this. In the
early 1990s its main focus was on manufacturing
monitors, desktops and motherboards. These functions
have long shifted to the mainland, to be replaced by the
manufacturing of laptops and LCD (liquid crystal
display) screens. Meanwhile, Taiwan's IT research and
development (R&D) sector looks set to capture
increasingly bigger market shares in semiconductor
design. Taiwanese manufacturing is moving up the food
chain in classic style and its R&D sectors are
unlikely to be easily replicated on the mainland.
Unfortunately, the big wrench in the works is
whether Beijing would accept Chen's vision for direct
transport links. Judging by the reception of state
Chinese media, which promptly savaged Chen and his offer
as "insincere" and a "gimmick", this seems unlikely.
Until Chen accepts Beijing's "one China" principle, any
movement on cross-Strait issues is unlikely, no matter
how optimistic Chen may appear. Then again the
direct-transportation issue may well be a tool for Chen
to get Beijing to accept his one-country-on-each-side
approach and a rejection by Beijing could be used by the
DPP to denounce China as unreasonable and bolster his
election campaign.
Until then, anybody facing
the current six-hour flight from Taipei to Shanghai is
probably well advised to buy a good book for the
journey.
(Copyright 2003 Asia Times Online Co,
Ltd. All rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
|
| |
|
|
 |
|
