Tue, Feb 22, 2005 - Page 8 News List

Editorial: Direct cargo flights problematic

At a time when China is actively pursuing an "anti-secession law," Taiwan is rushing to embrace direct cargo flights across the Strait based on the flights that took place over the Lunar New Year. However, the possible negative impact of direct cargo flights is much greater than for passenger flights. The government should think twice before actively pursuing such cross-strait links.

Now that the Lunar New Year is over, Taiwan and China intend to begin negotiations about cargo flights based on the Macau talks, with the goal of establishing multi-destinational, two-way and non-stop cargo flights as a milestone in cross-strait cargo shipment.

Most Taiwanese businesspeople invest in China to take advantage of cheap land and labor. By setting up factories there, it is also easier for them to break into the Chinese market. The proposed cargo flights will help solve the transportation problems faced by Taiwanese businesses in China and facilitate shipment of various goods. But such cargo flights will inevitably accelerate the outflow of the nation's capital to China and may also act as a catalyst for the relocation of many Taiwanese industries.

On the other hand, after the opening of direct cargo flights, low-cost and low-quality products made in China will flood Taiwan's market, overwhelming domestic products. This will make it even more difficult for struggling industries to survive, forcing factory closures and escalating unemployment.

The government's plan to push ahead with cross-strait cargo flights may be intended to enhance the nation's competitiveness, but the proposed plan seems beneficial to Taiwanese businessmen in the short term and detrimental in the long run. In the short term, the plan will boost Taiwan's industries connected with China. In the long term, the side effects of the policy will certainly include the relocation of Taiwanese industries, an outflow of capital and increased unemployment -- symptoms similar to those suffered by Hong Kong prior to its reversion to Chinese rule. Just like Hong Kong, Taiwan will also not be able to resist the fate of being annexed by China.

If Taiwan were to become part of China as a consequence of a long-standing outflow of capital and the relocation of industries, the nation's economy would sink into irreparable recession. Therefore, the government must formulate a strategy to deal with the side effects caused by direct cargo flights.

The charter flights during the Lunar New Year holiday and direct cargo flights differ in one fundamental way: The former are limited to a special holiday period, while the latter would be routine flights on a daily basis. For direct passenger flights during the Lunar New Year, the government could say such flights "simulated" cargo flights across the Taiwan Strait. But the impact is going to be far greater than that of the charter flights for the Lunar New Year.

The government's cross-strait policy is described as "actively opening, effective management." While there is plenty of "opening," "effective management" is lacking. As for opening up, this can be seen in the active pursuit of direct Lunar New Year passenger and cargo flights -- and in the wake of the United Microelectronics Corp (UMC) case, it seems that the government's attitude to investment in China has also relaxed.

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