China-Taiwan Overtures Hint at New Talks

Recent statements from Taiwan and mainland China have heightened speculation that the two longtime adversaries might at last be preparing for talks to open direct trade, transportation and telecommunications links across the Taiwan Strait.

Hints of possible change first came in May, when Taiwanese President Chen Shui-bian indicated a willingness to let nongovernmental groups play a role in negotiating the direct links. Beijing quickly applauded Chen’s comments and established a special trade promotion committee.

Because the mainland Communist authorities view Taiwan as a rebel province that rightly belongs under their control, they have consistently refused government-to-government talks.

This month, Chinese Vice Premier Qian Qichen appeared to drop Beijing’s long-standing precondition to talks: that Taiwan endorse the idea that there is only one legitimate government for China, an idea known as the “one China” policy. Although other comments by Qian appeared to cast some doubt on the sincerity of his remarks, senior Taiwanese officials remained cautiously upbeat.

“We consider this as a time when both sides are building momentum,” said Tsai Ing-wen, chairwoman of Taiwan’s Mainland Affairs Council, the government body most closely involved in cross-strait ties.

Direct ties between Taiwan and mainland China would help ease tensions along one of the world’s few remaining Cold War political fault lines--one that has drawn U.S. naval ships to the region several times.

Amid the peaceful overtures, a Pentagon report last week said China is pursuing a defense buildup that especially threatens Taiwan. It cited the addition of short-range ballistic missiles in Fujian province, across from Taiwan. China has also acquired Russian-made submarines, which could cut off Taiwan’s sea lanes and threaten American forces that might respond, the Pentagon said.

But the hope is that direct trade and other ties would streamline a large and growing indirect commercial relationship between Taiwan and mainland China that has developed over the last two decades despite the political tensions. There has been no direct trade across the strait since China’s Nationalist Party leader, Chiang Kai-shek, retreated with his supporters to Taiwan in 1949 after losing a bitter civil war to the Communists.

Beijing broke off most unofficial contacts with Taiwan three years ago after the island’s then-president, Lee Teng-hui, said ties between Taipei and Beijing should be like those between two states.

Few of those following events in the region believe that negotiations for direct links would be either quick or easy. Many talk of a process that could take years to complete. Still, several factors fuel a guarded optimism that a start might be possible.

Among them:

* Direct ties carry potentially strong benefits for both sides, political analysts believe.

For Beijing, they would bind the democratic island more closely to the mainland’s huge market. They also would likely boost Taiwan’s already considerable contribution to the mainland’s industrial growth.

Last year, indirect trade between China and Taiwan totaled nearly $28 billion, while Taiwan’s cumulative investment in mainland China now tops $50 billion, according to statistics from Beijing.

For Taiwan, dealing with these investments directly rather than via circuitous routes would substantially cut operating costs. A Taipei executive who today requires a full day to reach his plant in Shanghai because he must fly via Hong Kong would cut his travel time to 90 minutes on a direct flight.

Direct links would also make Taiwan far more attractive to foreign investors looking for a base for their operations in mainland China, business executives argue.

“If there are no [direct] links, then there will be no [regional corporate] headquarters for greater China in Taipei,” Stan Shih, head of Taiwan’s largest computer group, Acer, told journalists last week.

* The timing for both sides seems more favorable than at any point in recent years. With the opposition Nationalists in disarray in Taiwan and the growing possibility that Chen might win a second four-year term in a presidential election scheduled for 2004, there are good reasons for Beijing to change its policy of shunning Chen, analysts believe.

They say a new Chinese leadership expected to emerge from this fall’s 16th Communist Party Congress would be freer to make this shift.

For Chen, simply getting negotiations started would be an enormous political windfall. It would ease pressure from many of Taiwan’s leading business executives who are worried about the cost of dealing with an increasingly important market through convoluted routes.

Such a breakthrough would also be popular among Taiwan’s large bloc of moderate, independent voters who have viewed Chen’s inability to work with China as a major drawback. In the past, China has denounced Chen’s Democratic Progressive Party as a separatist movement.

* The conclusion this month of a commercial air agreement between Hong Kong and Taipei has proven that Chen’s government can negotiate successfully with a government that is part of the People’s Republic of China, Taiwan officials say.

“It was a very helpful process for us,” Tsai said. “It is significant that both sides can actually work together to work something out that is acceptable to both sides.”

During those talks, which took a year to complete, Taiwan’s eight-member negotiating team was known as the nongovernmental-sounding Taipei Airlines Assn., but in fact it included three members of Taiwan’s government.

Noted a seasoned Taiwan-based diplomat: “Taiwan conceded the name, but the outcome was just like any other international agreement. It showed what Beijing really wanted was a fig leaf.”

Tsai indicated that a similar ambiguity might help get negotiations started with the mainland on direct links but that once started, the talks themselves would be far more difficult.

She noted that, unlike the Taiwan-Hong Kong accord, there would be no prior agreement or earlier relationship to build on.