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Cross-Strait links possible. No,
really
By Laurence Eyton
TAIPEI - Taiwan's being on the verge of opening
direct transportation and commercial links with mainland
China has become something of a bad joke to businessmen
on both sides of the Taiwan Strait. It has been talked
about for a decade, during which reporters such as this
one have made a good living saying "not yet".
But now change really is in the air. Taiwan has
not only produced a tentative timetable for when direct
links might open, but has started putting into place a
legal framework to remove obstacles to prevent it from
happening.
The reasons that links have remained
elusive over the "lost decade" have varied over time. At
first the problem was that Taiwan, believing itself to
have the stronger hand to play, made preconditions for
discussions over opening direct links that Beijing found
utterly unacceptable. These included dealing with the
Taipei government as an equal, renouncing the use of
force and giving Taiwan a free ahead in international
diplomacy. As China's economy strengthened in the 1990s,
the advantage moved to Beijing, which has, after the
pro-Taiwan independence President Chen Shui-bian took
office in 2000, demanded that Taiwan agree that it is
part of "one China" - a weasel phrase that Beijing
interprets in several different ways depending on its
audience and which is unacceptable to the current
government in Taipei.
What has eluded both sides
up to now has been a formula that will allow them to
negotiate without implying recognition of either side's
political agenda by the other.
Nevertheless, the
clamor to open direct links has grown. With China now
equaling the US in importance to Taiwan's businessmen,
the expensive rerouting and transshipment of cargo and
the inconvenience of passengers having to change planes
in "third destinations" - a euphemism for Hong Kong,
Macau and Japan - when flying across the Taiwan Strait
has proved enormously frustrating.
A year ago,
however, Chen Shui-bian suggested a way out.
China's reluctance to negotiate with Taiwanese
officials is shared by its special administrative
regions (SARs) of Hong Kong and Macau. Taiwan, however,
has direct links with the two former colonies and last
year renegotiated an air agreement with Hong Kong. It
did so by both sides letting ostensibly private business
organizations representing the major players in Hong
Kong and Taiwanese air transport do the negotiating.
Since, of course, anything they concluded had to be
politically acceptable and have official approval, what
these business associations did was to retain the
services of transport ministry officials as "advisers"
and let them do the real negotiating. The strategy
worked well and led Chen to suggest in August last year
that it might be adopted as a modus operandi for
negotiations to open direct links with China itself.
For the next year little was heard of Chen's
idea and it was assumed by many to be dead in the water.
But progress of a sort has been steadily made.
One of the problems for Taiwan has been that its
laws governing relations with China and with the SARs
are significantly different. Private organizations are
allowed to conduct negotiations on matters concerning
government agencies with the SARs. They are not,
however, allowed to do so with mainland China. To
implement Chen's idea, the first thing needed is to
change the law. Such a change is now pending in the
legislature. It narrowly failed to pass at the end of
the last session in June but should pass in the session
that has just opened.
The second problem for
Taiwan has been the security question. One argument
against direct links without some kind of peace treaty
first is that Chinese warplanes are based only 10
minutes' flying time from Taiwan, and the island's
military has long worried that an attack might sneak in
via commercial flight paths. Primarily to address the
security situation, but also to attend to other basic
administrative matters, the Taipei government in
mid-August released a report on how direct links will
operate, which had taken a year to research and
assemble.
As usual with such reports, it has
managed to annoy just about everyone, which probably
indicates that it is the best compromise Taiwan can find
for the moment on its conflicting cross-Strait
interests.
And the report followed sharply on
the heels of an announcement by Chen that direct links
would be in place by the end of next year.
The plan
The major changes center on
transportation.
The government wants to open two
Taiwanese airports, Chiang Kai-shek International, near
Taipei, and Kaohsiung International for cross-Strait
flights with any city in mainland China with which a
route might be negotiated. The top five mainland
destinations Taiwan carriers want to serve, according to
a survey by the Mainland Affairs Council, are Shanghai,
Guangzhou, Beijing, Xiamen and Shenzhen.
But the
most noticeable thing abut the plan is that whereas the
flights might be direct in the sense of boarding in
Taiwan and disembarking in mainland China without a
break or stopover, they are not direct in the sense of
taking the shortest route. Instead, planes will have to
make long detours to the north or south of the Taiwan
Strait itself and fly through either Hong Kong or
Japanese airspace before continuing to or from China. In
fact, flight paths will be similar to what they are now.
The only difference is that planes will not have to land
in these "third territories" nor, of course, will
passengers have to change planes. That planes would not
be allowed to fly directly across the Taiwan Strait is
key, the Taiwan Ministry of National Defense says, to
offsetting the security threat that opening direct
flights represents.
Landing rights and schedules
would be negotiated by private associations representing
carriers, as is currently done with Hong Kong and Macau.
As for sea transport, all of Taiwan's five
international ports would be open for cross-Strait sea
transportation. There are already, in fact, direct
shipping routes to Kaohsiung, but only for cargoes that
are to be transshipped out of Taiwan. All that is needed
is to allow these cargoes through Taiwan's customs.
The report also went into great detail about the
possible economic risks to Taiwan of direct links. Among
these are an inflow of cheap Chinese consumer goods and
agricultural products, damaging Taiwan's once-mighty
low-tech small and medium enterprise sector, and for
agriculture driving the final nail into the coffin
already carpentered by World Trade Organization entry.
This might produce a rise in unemployment, depressing
salaries and consumption, while capital outflow to boom
areas in China might lead to under-investment in Taiwan
and dampen Taiwan's property market, which is just
emerging from a decade-long slump. The report also said
there was a risk of deflation and a fall in Taiwan's
trade surpluses, while the defense budget will balloon.
The opposition immediately pounced on this
aspect of the report, claiming that it failed to take
into account any of the advantages that might accrue
from direct links. For example, opening of direct
commercial links might well lead to a capital inflow
once Taiwanese businesses in China can move their
profits home without having to seek permission to take
them out again. The lack of links has also tended to
create an either/or dichotomy for foreign investors who
would like to treat Taiwan and China as one market but
of necessity must treat them as two, and then tend to
concentrate 100 percent on the bigger.
Actually
the report does not deny there are possible benefits to
opening direct links. And such criticism missed the
report's subtle subtext, which was that since Taiwan has
no choice but to open direct links - and soon - it is
necessary to look in depth at the various worst-case
scenarios that might result; handling success, after
all, would hardly present a problem requiring remedial
action.
The opposition has also, predictably,
pilloried the idea of not having direct cross-Strait
flights. But the defense establishment actually has a
stronger voice in the opposition parties than in the
current ruling Democratic Progressive Party (DPP), and
should the opposition win next year's presidential
election it is doubtful that it would overrule the
Defense Ministry's caution.
Slow
progress
Taiwan has quietly been testing barely
perceivable yet quite significant relaxations in the
restriction on direct transportation.
On January
1, 2001, for example, Taiwan opened the "small three
links", basically a direct-links plan in miniature
between the islands of Kinmen and Matsu, near the
Chinese coast, and the mainland cities of Xiamen and
Fuzhou. Ignored at first by China, the plan slowly found
grudging acceptance when Taiwanese businessmen, rather
than just the islanders the route was originally opened
for, were allowed to use it to get to their Fujian
province-based businesses. This week a Taiwanese coast
guard officer kidnapped by Chinese fishermen was
returned to Taiwan via the "small three links"
connection, marking the first time that China had used
the route for an official purpose.
At the Lunar
New Year this year semi-direct charter flights were set
up between China and Taiwan to bring Taiwanese
businessmen home for the annual holiday. The flights
were mainly from Shanghai to Taipei with a stop in Hong
Kong. Unlike standard China-Taiwan flights, no change of
plane was necessary, the Hong Kong stop being merely a
formality to maintain the "fiction" of the direct-links
ban.
And only last week Taiwan gave the go-ahead
for semi-direct cargo flights, allowing one cargo plane
a day to travel to Shanghai with a stopover in Hong Kong
without having to transship cargo. China's reaction was
mixed, in that it deplored the fact that this was simply
a unilateral action on the part of Taiwan rather than
the result of the kind of bilateral consultations - who
is Taiwan to say who may fly to Shanghai? was the gist
of the reaction - without actually rejecting the
flights.
The timetable
Chen has said
he aims to open cargo shipment by next March and
passenger transportation by the end of next year. This
timetable depends on a number of factors.
The
March deadline is significant because Chen wants to go
into the presidential election showing he has made
genuine progress on the links issue. But for this he
needs the legislature to amend the law, talked about
above, and he also needs more goodwill from China than
is likely to be forthcoming, since Beijing has no reason
to give Chen, whom it loathes, any advantage over his
pro-unification opponents.
In the implementation
of Chen's schedule, the presidential election looms like
a rock on which all hope might founder. But this is to
be far too pessimistic. It is likely that, whoever wins
the election, there will be rapid progress on the links
issue once it is over, since the stasis that has
characterized cross-Strait affairs for the past four
years will have to go.
Beijing has always seen
Chen as a one-term aberration it could afford to ignore
and wait for the return of the Kuomintang (KMT), an
opinion the KMT has done much while in opposition to
foster. Erstwhile enemies, the KMT and the Beijing
regime now have far more in common concerning their
views of Taiwan's future than the KMT and Chen's DPP. If
the KMT (along with its sister party, the People First
Party) wins the election, then a rapprochement between
Taiwan and China might be quite speedy and direct links
might be opened according both to Chen's plan and
timetable.
A Chen victory would, however, force
a major rethink in Beijing. Having ignored him and his
repeated goodwill overtures for four years, it is
difficult to believe that China's new leadership can do
this for yet another four. Just as significant, a Chen
victory would be a disaster for the unificationists of
such major proportions that it would plunge both parties
into turmoil from which whatever emerged might be far
less sympathetic both to the idea of unification and to
China. As a result, Beijing would be forced to realize
that it has to deal with Chen, like it or not.
Given the snail's pace at which policy in
Beijing evolves, this might mean that talks on opening
direct passenger links won't start until 2005, but once
they do, since they will involve simply another outing
of the tried and tested Hong Kong formula, they should
conclude quickly as long as Beijing concentrates on
practical considerations rather than playing politics.
(Copyright 2003 Asia Times Online Co, Ltd. All
rights reserved. Please contact content@atimes.com for
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