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    China Business
     Sep 23, 2005
Taiwan welcomes Chinese tourists - carefully
By Ting-I Tsai

TAIPEI - A long-time dream of Professor Li, a Beijing-based academic, finally came true in 2004 when he visited Taiwan, after he had spent years living in Japan and Korea and visited numerous other countries around the world. In his week-long trip, however, he was not allowed to freely have a cup of tea or coffee with his Taiwanese friends. "The way they treat us is just like the North Koreans do," he complained.

Taiwan, which Beijing insists is part of its territory, has become one of the most attractive places on earth for Chinese tourists. The attraction derives partly from the mystique created by the long ban on travel between China and Taiwan, as well as the somewhat misleading images constructed by Beijing's historical



propaganda about Taiwan. A manager from the Beijing-based China Travel Service, Tuan Jidong, noted, "Taiwan represents an ethnographical feeling to the majority of Chinese, and lots of mainlanders feel regret for visiting all of the provinces around China except Taiwan."

After years of silence on the travel ban issue, Chen Yunlin, head of China's Taiwan Affairs Office, recently announced the lifting of the travel ban on Chinese tourists to Taiwan. At the same time, China offered Taiwan a pair of pandas, and allowed the import of six additional types of fruit from Taiwan. The measures were represented as "gifts" to former Kuomintang chairman Lien Chan at the end of his historic China trip, and were clearly made in hopes the offer would boost support for Taiwan's China-friendly opposition Kuomintang (KMT) and People First Party (PFP).

Investors took note of the potential that Taiwan could benefit from wealthy Chinese tourists, as Hong Kong has; the share prices of companies in Taiwan's tourism sector increased 35.85% by the end of August, according to JF Asset Management (Taiwan) Limited. As Taiwan now plans to allow 1,000 Chinese tourists to enter its territory every day, for a maximum 10-day trip, 365,000 Chinese are expected to visit Taiwan annually once the ban is officially lifted in both Taiwan and China. Based on the number of Chinese tourists and assuming daily spending of US$80 each, Wang Chi-han, chairman of Taipei-based Chang-han travel agency, suggested that lifting the ban is likely to bring some NT$600 million (US$18.1 million) annual revenues to Taiwan.

A hot competition among Taiwan's hotels, meanwhile, is expected to begin next year, as 46 hotels, including 36 international tourist hotels, are under construction or planning to expand. "I think it would be great for the economy," said Sean Chuang, president of Leofoo Development Co, which owns the Westin Taipei and plans to construct 17 hotels around Taiwan in the coming years. Local travel agents also have not only aggressively sought commercial partners in China but also introduced numerous specialty trips for Chinese tourists, which include a beauty tour that involves facial surgery and spa treatments, as well as a wedding-photo tour to well-known tourist spots in Taiwan.

Although Taiwan's government appears to be lukewarm to the anticipated wave of mainland Chinese tourists, thousands of enthusiastic Chinese travelers rushed to local travel agents to register shortly after Beijing's official announcement in May.

According to surveys, Chinese tourists are particularly interested in visiting Taiwan's Ali Mountain, which is located in the northeastern part of Taiwan's southern Jiayi County; Sun Moon Lake in central Taiwan; and Taiwan's National Palace Museum; which preserves some 650,000 historical art pieces, including many of the Chinese imperial collection from Beijing's Forbidden City. Most of these artworks were famously transported from the mainland to Taiwan by the KMT army near the end of the Chinese civil war.

"Taiwan is a good place. Taipei is so progressive. In my mind, Taipei is a bit behind Tokyo but ahead of Seoul," Li noted after his visit.

In May, the China National Tourism Administration announced further principles for easing restrictions on tourist travel to Taiwan, saying that any opening would be done under the condition of signing bilateral agreements, and listing travel agents on both sides entitled to conduct the business. It also repeated Beijing's insistence that talks on the issue be conducted between "non-government" groups, a demand Taiwan has so far refused and tried to challenge.

Suggesting both sides adopt the "Macau model", used to reach an agreement on the 2005 Lunar New Year charter flights, Beijing's official Xinhua news agency reported that China "hopes the Taiwan authorities ... will quickly authorize non-government tourism organizations on the island to conduct consultations with the mainland side." For Taiwan, however, forcing Beijing back to official-level talks is a higher-priority issue rather than opening the gate to Chinese tourists.

Joseph Wu, head of the Mainland Affairs Council, said the opening to Chinese tourists is much more complicated than charter flights, which involved only aviation authorities. At the end of July, he authorized the Travel Agents Association of the Republic of China on Taiwan to assist the government in arranging meetings and negotiations with China, and MAC further emphasized in early September that all issues "would be negotiated with China by a negotiation team constituted by the related governmental departments." To Taiwan, issues demanding discussion include: qualifications of the tourists, verification of their identities, repatriation of overstayed visitors, and regulations for travel agencies.

The concept of lifting the ban to allow Chinese tourists to visit Taiwan was introduced in Taiwan's cross-party Economic Development Advisory Conference in August 2001. To implement the conference's conclusion, Taiwan unilaterally eased its own ban on Chinese tourists in 2002, but it has accepted only those PRC passport-holders who are already living or traveling overseas.
Furthermore, the authorities have introduced a strict mechanism to prevent Chinese tourists from going missing, although the scale of that problem has not been large. As of May, some 54,000 Chinese tourists had visited Taiwan since 2002, and some 70 had gone missing. By contrast, Taiwanese made nearly 3.7 million trips to China in 2004, according to figures from Beijing. Many of the missing tourists were associated with specific incidents. For example, in the summer of 2004, 17 Chinese tourists disappeared shortly after they arrived at Taiwan's Chiang Kai-shek International Airport, and another 13 Chinese tourists went missing shortly after they checked in at their hotel.

Under Taiwan's mechanism of conducting Chinese tourists, Taiwanese travel agents who want to deal with Chinese tourists have to have at least five years of experience, and have to deposit NT$1 million with the travel agency association to which they belong for emergency use if the Chinese tourist absconds or becomes involved in an accident in Taiwan.

Currently, 61 Taiwan travel agents are entitled to conduct this business. Chinese tourists have to prove that they have full-time employment or own at least NT$200,000 in assets. Such tourists will also only be allowed to enter and leave Taiwan in tour groups of between 15 and 40 people, which must include a tour guide. Permission to visit Taiwan will not be granted to Chinese civil servants, military or political officials, or Chinese citizens who have broken the law within five years before their applications. Chinese tourists attending a seven-day tour are entitled to have one day of free time, while those attending eight to ten-day tours are entitled to one-and-a-half days of free time. But on such days, the tourists are required to be back at their hotels by 11pm.

The restrictions do not end there. Travel agents managing Chinese tourists are required to check and report on the status of the tourists to the Tourism Bureau within two hours of their arrival and departure in Taiwan. In the event of overstays by their clients, travel agents can be banned from bringing more groups to Taiwan. The bans can last from between one month to a year, depending on the number of clients who overstay their visas.

Travel agents will have their quotas for Chinese tourists reduced if too many overstay their visas or disappear. Eric Chang, chairman of Taiwan's China International Youth Travel Service, noted that the mechanism is actually not fair to travel agents, since it places responsibility on local travel agents to verify Chinese tourists' identifications. "If the government cannot do so, how can we?" he noted, adding that it is unlikely that many Chinese tourists would "escape", since due to the net worth requirements, these tourists are nominally far wealthier than the average Taiwanese.

As of April, Beijing allowed its citizens to visit 67 countries, and 36 million Chinese are estimated to have traveled overseas since China started to allow overseas travel in 1983. Taiwan, meanwhile, has not been listed as one of the approved destinations, which would make it illegal for Chinese tourists to visit Taiwan.

With economic growth in Taiwan slowing since 2000, travel agents hope that Chinese tourists can bring a flood of money to stimulate Taiwan's economy. "Most of Taiwan's manufacturers and high-tech companies have shifted to China. What we can do now is actively promote the service industry," said Wang Chi-han, chairman of the Taipei-based Chang-han travel agency.

Ting-I Tsai is a Taipei-based freelance writer.

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