Government could open China links by year's end

Taiwan may ease its controls on transport and commercial links with China if the mainland enters the WTO later this year, a report said yesterday.

Scenarios under discussion include direct air links between Taipei and Shanghai and direct shipping connections from Taiwan's southern port of Kaohsiung to China's Shanghai and Xiamen, a Chinese-language economic daily said.

Authorities here have been reluctant to lift bans on links with China because of Beijing's hostility to Taiwan, although it allowed limited direct shipping to the mainland from two offshore Taiwan islands in January.

"Concrete measures" will be worked out from the findings of the ad hoc national economic advisory council that opened Sunday, the newspaper said, quoting an unnamed official.

The council, which includes economists, business leaders and government officials, will hold talks until August 18 and present conclusions at a full session meeting slated for Aug. 24 to 26.

President Chen Shui-bian (陳水扁) has pledged to implement proposals agreed on during the discussions.

Taiwan's entrepreneurs have pushed for closer links with China by lifting the bans -- in force since Taiwan and China split in 1949 at the end of a civil war -- as they allow production to be moved to China where they can enjoy cheaper labor and land.

Local companies have poured about US$70 billion into China since Taipei relaxed rules on civil exchanges in 1987.

Taiwan has adopted a "go slow" policy on China-bound investment since 1996, aimed at ensuring Taiwan does not become too economically dependent on the mainland and preventing an exodus of capital and technological know-how.

The policy bans single investments worth more than US$50 million and those related to infrastructure and advanced technology projects. However, such investments are often made through foreign subsidiaries of Taiwanese companies.