Matsu hopes to gain from China trade

The commencement of direct "three small links" between Taiwan's outlying islands and the Chinese coast yesterday may appear to offer the people of Matsu a golden opportunity to bolster the faltering economy on the tiny archipeligo.

But the limited scope of the exchanges and the likelihood of comprehensive direct links between Taiwan proper and China brought by the looming entry of both sides of the strait into the WTO may mean that the economic benefits to Matsu may well be short lived.

At the ceremony held yesterday at Matsu's main port of Fuao to mark the opening of the links Tsao Erh-chung (曹爾忠), the island's sole representative in the Legislative Yuan, stressed that "The main goal of the small three links is to bolster the economies of Kinmen and Matsu."

In the initial stages, only simple commercial exchanges between and travel by residents -- or people who can prove they have lived there for at least six months -- of Kinmen and Matsu and the Chinese coastal cities of Xiamen and Mawei, respectively.

Tsao said that for the plan to "truly benefit the local economy, Mastu should be permitted to serve as a midway station for the trade of goods between Taiwan and China."

This proposal was formally forwarded in writing by the Matsu local government to Cabinet secretary-general Chiou I-jen, (邱義仁) who travelled to the island to officially open the links yesterday.

Chiou was cool on the suggestion saying the Cabinet would not allow goods from China to be exported to Taiwan via Matsu and only "consider" the possibility of allowing goods to flow the other way via the tiny isle that lies only 9km off China's coast.

However talk of transforming Matsu into a midway trade station may prove to be purely academic.

Vice chairman of the Mainland Affairs Council Chen Ming-tung (陳明通), who was also in Matsu yesterday, said that Taiwan and China's entry into the WTO, which would be the catalyst for comprehensive trade links across the strait, may eventuate by the middle of this year.

Direct "big links" between Taiwan proper and China would negate the need for goods to travel across the strait via a third port such as Hong Kong or, if was permitted, Matsu.

Indeed, locals fear that once the "big links" are in place, Matsu and Kinmen will have served their purpose as a test case for direct ties and their commercial prospects in the grand scheme of China and Taiwan will diminish.

"Matsu people ask themselves that if the small links work well and both sides agree to the big three links, what will happen to Matsu?" said Yu Hsin-tai (游新太), director of the Matsu Fishermen's Asociation.

"Once big three links are opened any benefits of small links will die," he said.

Hopes that Matsu may be able to siphon off some financial gain from serving as a midway trade station are fueled by the fact that the economy's two major pillars -- fish and soldiers -- are becoming increasingly rare.

The number of troops in Matsu have been cut by 40 percent over the last two years as tensions across the strait eased and have dropped to 3,000 down from the 20,000 that resided here during the peak of cross strait tension in the 1950s and 1960s.

In the past, their patronage of local businesses ensured that virtually every household on Matsu was financially stable, according to Yu.

"The presence of one soldier here is enough to support four families," Yu said. "Their reduced numbers means that profits of local businesses have been cutting into the profits of local businesses," he said.