A sign of hope on cross-strait
links By Craig Meer
TAIPEI - It's no surprise that the spate
of scandals shaking Taiwan's President Chen
Shui-bian's hold on power are bringing smiles to
the leaders in Beijing. But it could turn out to
be far more important that the resultant shift in
policymaking authority in Taipei is already making
a difference in cross-strait business links.
was shown most tellingly in last week's
announcement by Taiwan's Mainland Affairs Council
(MAC) on expansion and normalization of
cross-strait charter flights. Then this Tuesday, a
statement by Chen himself showed a remarkable
change in tone that should warm the hearts of
Taiwanese doing business on the mainland. All this
is happening just as commentators were about
to write off completely
the economic credentials of the Chen
week's decision [by the MAC on charter flights]
indicates the government is starting to change its
attitude toward cross-strait relations and is
becoming more open," Wu Ching-han, a market
analyst at Grand Cathay Securities in Taipei, told
Asia Times Online. "Taiwanese Premier Su
Tseng-chang is more liberal in his outlook, and
because of the recent scandals, which saw Chen
step back from policymaking, Su has been given a
chance to pursue this kind of reform."
Chen's family has been embroiled in a
series of scandals in the past few months, and
three weeks ago he handed over "most" of his
formal powers to the more liberal Su. The move
failed to satisfy Chen's legislative critics, who
last week commenced a symbolic recall motion
against the president. Although the motion is
assured of failure - it requires a two-thirds
majority to pass and then must be ratified by a
national referendum - the likelihood of Chen
reasserting full presidential authority between
now and the end of his term in early 2008 is slim.
Official contact between the two sides of
the Taiwan Strait has been frozen since the
conclusion of the Chinese Civil War in the late
1940s. Indirect contact only became possible in
the late 1980s when a partial thawing of
cross-strait tensions saw Taiwanese visitors flock
to mainland China through a third country or
region, usually Hong Kong.
For a couple of
years now, the two sides have allowed a small
number of direct charter flights over the Lunar
New Year holiday so Taiwanese business people on
the mainland can travel home for the holidays - an
annual event that has had symbolic but not
substantive importance. All in all, "closure" has
been the ruling policy paradigm.
June 14 announcement by MAC chairman Joseph Wu
suggests this is about to change.
new agreement negotiated between Taipei and
Beijing, Taiwanese firms based in mainland China
will be allowed to commission cargo flights to
ship merchandise to their mainland operations, and
the New Year passenger flights will be expanded to
encompass three other holidays on the Chinese
calendar: Tomb-Sweeping Day, the Dragon Boat
Festival and the Mid-Autumn Festival.
initiative, though unspectacular at first glance,
has been a long time coming and is real progress
in a policy area that counts advances in inches
rather than miles.
"The two sides have
been talking for a long time to get to this point,
and the latest announcement represents the
culmination of a lot of effort. It's one small
step in an ongoing process," said MAC deputy
commissioner Liu De-xun. "Of course, it's not as
though we have been talking 24/7, but the
negotiation has been ongoing since 2003."
And there is more in the pipeline. Joseph
Wu said at the policy launch last week that Taipei
and Beijing are committed to providing regular
charter flights for cargo and passengers "almost
on a daily basis". The first flights under the
agreement are expected to take off prior to this
year's Mid-Autumn Festival (the Moon Festival) on
October 7. More frequent flights will have to wait
- how long is still up in the air. Wu said it
could be as little as four months, but most
insiders are tipping 12 months to two years.
So what has generated Taiwan's new-found
enthusiasm for the mainland? Certainly common
sense has something to do with it.
estimate by the MAC released last week puts the
amount of Taiwanese investment in mainland China
at US$150 billion - more than triple the council's
previous best guess. Indirect two-way trade across
the strait was worth $76 billion last year, and
has been increasing at an average annual rate of
25% since the start of the decade. China has been
Taiwan's largest trading partner since 2003.
Trying to run against this tide is a losing game.
"Direct links will save time and money,"
said Chen Yong-sheng, a research fellow in
National Chengchi University's Institute of
thought we could put off opening because as a
small economy we were scared of the consequences,
but the calls from business have been getting
louder and louder ... It's hard to estimate the
exact cost of retaining the restrictions [on
cross-strait travel], but think about the
difference between a two-to-three-hour direct
flight to Shanghai and a two-hour fight to Hong
Kong, a three-hour stopover [at Hong Kong
International Airport], and a further three hours
to fly to Shanghai. It adds up."
always, politics is probably the real mover and
President Chen's statement on
Tuesday night underscored the new political
reality on the island. Although the speech was
framed as a counterattack against the opposition's
campaign to oust him, Chen uncharacteristically
did not use the occasion to provoke mainland
China. That bodes well for stable relations
between the two sides of the Taiwan Strait.
Beijing almost certainly likes the current
turn of events, but analysts say at least part of
the reason for last week's breakthrough on direct
links was China's desire to cool things down in
"China wants Chen to stay where he
is," said Wu Ching-han. "If he were to step down
now, [Vice President] Annette Lu would have to
take over, and then the situation could change
really quickly. Chen is a known quantity, and from
now on he won't be able to do anything extreme.
From China's perspective, that's ideal."
And charter flights are the perfect
bargaining chip for Beijing to play because they
don't touch on the thorny issue of sovereignty.
MAC's Liu said: "The one-China principle is not an
issue for chartered flights, as the airline
company takes the responsibility for negotiating
landing rights and so on. Regular flights are a
different story - with these you [the government]
have to negotiate routes and other matters, and
that might impact on it."
liberalization of the cross-strait economy is
still a long way off. This said, last week's move
brought the two sides just a bit closer together,
and there's probably a lot more where that came