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    Greater China
     Jan 21, 2005
Taiwan-China relations progress at glacial pace
By Laurence Eyton

TAIPEI - Progress is possible in Taiwan-China relations - it just proceeds at a pace more in glacial terms than in human-historical terms.

The news is that Taiwan and China have agreed to let six airlines from either side of the Taiwan Strait run charter flights between the two sides of the strait (more on that word "between" later) for three weeks over the Lunar New Year holiday period, which starts a week from Saturday. The reality is that it has taken three years to move from a suggestion as to how these negotiations might take place to their actually happening.

In the deal made last weekend, each side will operate 24 return charter flights over the Lunar New Year period on routes connecting Beijing, Shanghai and Guangzhou in mainland China with Taipei and Kaohsiung in Taiwan. The flights are specifically to enable Taiwanese businessmen who work in China and their families to return home for the holiday. No one else may travel, so don't try to book a ticket.

But do not mistake such limitations as a sign of unimportance. The restrictions are in fact a sign of Taiwan's super-cautious attitude to what will, when it happens, be the biggest change in relations across the Taiwan Strait since 1949 - direct transportation links.

In the late 1980s Taiwan, just emerging from 38 years of martial law, started letting its people visit China without trying to throw them in jail when they returned. The move, made originally for humanitarian reasons of letting exiles living in Taiwan visit their families in China, has changed more than its fair share.

In the wake of old soldiers went young entrepreneurs, and eventually more than US$100 billion in investment and a very large chunk of Taiwan's manufacturing industry (Taiwanese have more than 70,000 factories in China), which played a crucial role, especially in the wake of the hands-off attitude of Western countries to post-Tiananmen China, to making the People's Republic the economic giant it has become. Now China is on the verge of becoming the world's biggest information-technology (IT) producer, almost entirely a result of the inflow of Taiwanese money and know-how. Meanwhile, it has also become Taiwan's biggest export destination.

Despite the economic boom, politics between the two sides has stayed stuck in the Cold War era. China claims Taiwan and refuses to deal with its government in any way, occasionally threatening violence if Taiwan does not "reunify". Many officials and residents of Taiwan claim it is an independent state that cannot "reunify" because it has never been a part of the People's Republic, nor do its people show any interest in unification, for which, under its democratic system, they would have to vote. After a brief thaw in the early 1990s, China closed down the "non-official" negotiation mechanism in 1995 - in anger at then-president Lee Teng-hui's attempts to widen Taiwan's international influence - and they haven't been opened since.

All of this has been frustrating to the business community, because Taiwan has kept in place a policy that, in theory, only political negotiations could lift - one banning direct transportation, commerce and communications with China. Since the early 1990s, a regular topic of inquiry has been when the "three links" would be established.

It is more usual today to talk about "direct links", if only because at least two of the three restrictions have been successfully overcome. Letters can be sent and phone calls made across the Taiwan Strait, even if they are routed via Japan. Money can flow across the strait, even if it is done via subsidiary offices in Hong Kong. The final link that remains to be breached is direct transportation; there still isn't any.

For business people this is inconvenient, but not disastrous. It is annoying to have to fly to Hong Kong, change planes, then fly on to cities in China, but perhaps no more than that. For shipping, however, it is a different matter; direct links might cut shipping costs by up to 30% - no small amount given the high-volume, low-margin nature of Taiwanese industries in China, for most of whom shipping is a key component.

Despite the importance of direct shipping, it is nevertheless air links on which attention on both sides of the strait is concentrated. This is partly because to open them involves a higher degree of trust - Taiwan wants to be sure that the planes approaching on its radar are harmless civilian aircraft. The problem is that opening air links requires some degree of communication between governments, but Beijing will only talk to Taipei officials on conditions that Taipei cannot - and might never - accept.

In 2002, however, Taiwan's agreement with Hong Kong over air links came up for renewal for the first time since the handover of the territory to Chinese control in 1997. The idea of breaking off links with Hong Kong was so preposterous that Taiwan long before the handover had deemed it not a part of China proper. This piece of pragmatic sophistry allowed it to keep both links with the territory and the "direct links" ban. The Hong Kong government, however, saw itself as a part of China, with the usual prohibition of having anything to do with Taiwanese officials. How was the air-links agreement to be renegotiated?

In the end it was "negotiated" between two private associations representing Hong Kong and Taiwanese airlines. "Helping" them were government transportation officials from both sides, serving not in their official capacity but technically moonlighting as "advisers". And the system worked very well; face was saved, protocol adhered to and a deal was made.

Later that year Taiwanese President Chen Shui-bian suggested that a similar mechanism might be used to negotiate links with China itself. In mid-August 2003 the Taiwan government released a report on just how such links might work. Last weekend the new negotiation mechanism with China had its first outing, and on January 29 the first civilian non-stop flight from China to Taiwan for more than 55 years will arrive in Taipei.

This is not the first time that Taiwan-China charter flights have operated. For the Lunar New Year in 2003 there were flights, but they were restricted to a Shanghai-Taipei route and had to land in Hong Kong before flying on to Taiwan to keep to the letter of the direct-links ban. Last year there were no such flights, since China wanted to make Chen Shui-bian, whom it loathes, appeared ineffectual before the Taiwan presidential election in March. Taiwan's election cycle has in fact seriously hindered progress on direct links, the presidential poll and legislative elections in December precluding any measure of cooperation from China until their conclusion.

On January 10, however, a delegation for the opposition Kuomintang (KMT) met with the director of China's Taiwan Affairs Office, Chen Yunlin, to discuss the possibility of flights this year. While they swiftly reached an agreement, the Mainland Affairs Council (MAC) in Taipei, Taiwan's mainland-policy ministry and a perennial dog in the manger over any advance in ties, was swift to point out that the KMT had no real negotiating capacity and that only government officials could negotiate any deal.

Chen Shui-bian decided to override the MAC, and last Friday a delegation left Taipei for Macau consisting of Taipei Airlines Association (TAA) chairman Lo Ta-hsin and secretary general Solo Su, along with Civil Aeronautics Administration (CAA) - Taiwan's air ministry - director general Billy Chang and official Fang Chi-wen. In Macau they met Pu Zhaozhou, the head of the Taiwan, Hong Kong and Macau Affairs Department of the Civil Aviation Administration of China (CAAC), the CAA's counterpart, and three other CAAC officials. A deal on the Lunar New Year flights was reached within 90 minutes.

The negotiations were interesting in that they took the original Hong Kong model a step further. China was apparently happy to let officials talk to the Taiwanese as long as they were not technically negotiating with government officials. The idea that they were talking with Lo and Su of the TAA, with Chang just an adviser on the sidelines, might be a fiction, but it was a pragmatic face-saving one, and things went swimmingly. As for Taiwan, it appears happy to talk to Chinese officials, which all the Chinese delegation were.

The significance of the deal should not be underestimated. The set-up over the Lunar New Year period is identical to that announced in Taiwan's 2003 report. Planes will travel to and from multiple destinations, carriers from both sides will be involved and all planes must fly through the airspace of a third territory; Hong Kong or Macau for routes from Shanghai and Guangzhou, and probably Okinawa for flights to Beijing. Hence the flights are "between" both sides of the strait rather than across the strait itself. The 2003 report said that all direct flights must detour in this way, since Taiwan's military simply would not approve of planes flying directly across the Taiwan Strait - given that a Chinese fighter jet can cross it in less than 10 minutes.

Except for the fact that the flights are allowed only for a limited period and restricted as to who may use them, there is no difference between the Lunar New Year arrangement and how real direct air links will operate - at least until a level of trust is built up to allow flights directly across the Taiwan Strait itself.

Nobody expects the flights to make money; how could they, since their custom is entirely one-way - to Taiwan before the holiday and from Taiwan afterward? Carriers are interested in the flights as a way of staking claims to eventual routes, while the governments want to see if the plan can be made to work smoothly. If it does, and it is hard to see why it would not, there is no reason the Macau meeting formula used to set up the flights might not be used very quickly to set up scheduled direct flights before the end of the year. Once this is done, shipping will very rapidly follow.

And perhaps much more than that, because with direct air links Taiwan will be a long way to lifting its tight restrictions on Chinese visiting the island. This is seen as essential to its tourist industry, but it might be far more important than that. Currently Taiwan simply doesn't produce enough IT technicians to keep up with its own demand - given that so many of its engineers are, ironically, working in China. There is, therefore, a slow realization that the opening of Taiwan's labor market to highly qualified Chinese may be essential to the island's prosperity. And the possible social changes either side of the strait that might result from that could be as momentous for Greater China as the economic opening of the early 1990s.

Laurence Eyton is deputy editor-in-chief of the Taipei Times. He has worked in Taiwan for 18 years.

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Political tinderbox in the Taiwan Strait
(Mar 13, '04)

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(Feb 10, '04)

Taiwan business in China supports opposition
(Feb 4, '04)


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