China, Taiwan begin a 1000-mile journey

By F.J. Khergamvala

TOKYO, JAN. 2. The proverbial journey of a thousand miles began with China and Taiwan being forced by domestic business pressures to take the first step to establishing direct communications, postal and transport links, when three Taiwanese vessels sailed from Kinmen and Matsu to the mainland.

The Taiwanese vessels did not fly the island's flag, which in a way symbolises how business interests can drive off political pressures between two Chinese entities insisting on their own unique identity, yet trying to seek accommodation. The voyages by the three vessels from Kinmen (Quemoy) and Matsu, which lie just off the mainland is a win-win move that involves a climb down by both sides, with more to follow.

The ships were to complete the voyage on New Year day but it was ostensibly the weather, perhaps political considerations, that forced a postponement of the first legal cross straits sailing in 50 years. On Tuesday, more than 190 passengers from Kinmen, led by the County Magistrate, Mr. Chen Shui-tsai crossed over on two vessels to the port of Xiamen in mainland China's southern Fuzhou province. A 4,700 tonne vessel then carried over 500 pilgrims and about 20 local government officials and reporters, led by the Matsu county commissioner from the islet of Matsu to the port of Mawei in Fuzhou province.

China has deliberately played down what is now called the ``mini three links'' as too small and too late, but the fact that Beijing permitted the links to be launched without Taiwan officially and publicly accepting the mainland's version of the ``one-China'' principle suggests a pragmatic switch to gradualism. Beijing is likely to maintain the pressure on the Chen Shui-bian led Taiwanese Government to accept the island's place as part of ``one-China,'' but the overall strategy now seems to be to outflank the anti-unification Democratic Progressive Peoples (DPP) led Government in Taiwan by cultivating all other sections of society.

The absolute primary necessity of embracing Taiwanese business interests closer to Beijing may have influenced China's decision to accept the ``mini-three-links.''

The new acceptance of permitting limited movement of people and transport, between just Kinmen and Matsu in Taiwan, to Xiamen and Fuzhou decriminalises the reality of the existence of illegal trade that has been going on ever since Taiwan barred trade with the mainland in 1949.

The Matsu islands have a population of some 6,500 people. Kinmen is located about 280 km from Taiwan but is with hailing distance of the mainland.

In an era when the Chinese President, Mr. Jiang Zemin's son has joined Taiwanese plastics magnate, Mr. Wang Yung- ching in a $1.6 billion microchip fabrication joint venture in Shanghai, it is just a matter of time before Taiwan relaxes its $50 million investment limit on the mainland. Taiwanese investments on the mainland are up nearly 99 per cent in year 2000 to about $40 billion.

The mainland too needs to make concessions to viably utilise the annual 10 million passenger capacity of Xiamen and Fuzhou's six million capacity. Current flow through Xiamen is just three million. The two sides will now grapple with a face-saving way to move towards the larger and full links demanded by China, that of the ``three directs'' - people, trade and transport - between all of Taiwan and all of the mainland. Taiwan would want to gradualise this too and has linked such measures to Beijing opening unconditional talks. On its part, having helped Mr. Chen to show at home that he too could do business with the mainland, Beijing could at some point draw the line and insist on his acceptance of the ``one-China'' principle.

Among the mutual interests that drive this flourishing trade and economic relationship is the imminent entry of China and Taiwan into the World Trade Organisation. The U.S. vote in granting the mainland China Permanent Normal Trade Relations (PNTR) set U.S. approval for entry into the WTO, which requires Taiwan to lift such trade barriers. Taiwan can at best plead security considerations.

Taiwan pays a price by making a detour of trade and people through Hong Kong and Macao. Over two millions Taiwanese travel annually to China and according to China's figures, about 104,000 mainlanders go to Taiwan. Almost a whole day is taken up in transit through third airports. Direct flights between Xiamen and Taipei would take 20 minutes. Taiwan could risk a hollowing out if its companies wished to move closer to its mainland customers. Trade in the past year jumped to about 30 billions, with China (including Hong Kong) becoming Taiwan's second largest export market.

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Section  : International
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