Wed, Mar 08, 2006 page8

• Cross-strait trade progressing well

  • By Tung Chen-yuan 童振源
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  Next Tuesday marks the first anniversary of the passage of Beijing's "Anti-Secession" Law, and one cannot help consider the law's impact on China's Taiwan policy. Looking back over the past year, it is on the commercial front that China's Taiwan policy has seen the most changes.

  With regard to the communication platform established between the Chinese Nationalist Party (KMT) and the Chinese Communist Party (CCP) -- in the wake of the visits to China of former KMT chairman Lien Chan (連戰) and People First Party (PFP) Chairman James Soong (宋楚瑜) -- Beijing had already begun to promote this on the heels of Taiwan's 2000 presidential election. Lien and Soong had simply been delaying their visits until after the 2004 presidential elections, and their trips were not prompted by the passage of the Anti-Secession Law.

  After issuing a statement on cross-strait relations on May 17, 2004, Beijing became firmer in maintaining that the prerequisite for cross-strait economic exchanges should be adherence to the "one China" principle and that they be treated as a "domestic affair." Beijing even deliberately boycotted or delayed proposals to promote cross-strait negotiations on economic issues, including one relating to direct passenger charter flights during the Lunar New Year period.

  Ultimately, the passage of the Anti-Secession Law made absolutely clear the nature of the shift that had taken place in China's cross-strait trade and economic policies.

  At the same time that Beijing made public the details of the law, it became enthusiastic about promoting cross-strait affairs. It ceased to stress the "one China" principle as a condition for cross-strait economic exchanges and expressed a willingness to negotiate on direct passenger and cargo flights, and Chinese tourists traveling to Taiwan.

  In addition, following the promulgation of the law Beijing unilaterally offered preferential treatment to Taiwan in several areas, including tariff-free entry of Taiwanese fruit into China and 30 billion yuan (US$3.7 billion) in low-interest loans to Taiwanese businessmen.

  It also set up zones for cross-strait agricultural cooperation, allowed fishermen to work in Taiwan, announced forthcoming regulations governing travel to Taiwan by Chinese tourists and spoke of a wish to establish a mechanism for cross-strait cooperation on agricultural affairs.

  But while implementing these preferential measures, Beijing realized that domestic politics in Taiwan would have a tremendous impact on cross-strait economic and trade negotiations.

  As Beijing is hoping to use the KMT and the PFP to isolate or put pressure on the Democratic Progressive Party government to accept its conditions for cross-strait talks, it cannot ignore the two parties' contributions to cross-strait trade negotiations.

  However, it is also likely that the KMT will pressure Beijing not to negotiate with Taiwan's government in order to secure its own political influence.

  This situation became especially clear on the issue of Chinese imports of fruit from Taiwan. It may also explain why the Chinese government seemed to be taking a passive role in negotiating tourism-related issues and cross-strait direct charter flights prior to last year's local government elections.

  In the future, it is likely that the KMT, to secure its chances in the 2008 presidential election, will continue to tell Beijing not to talk to Taipei.

  Three factors in domestic politics may offset efforts to promote cross-strait negotiations on economic issues. But they are not likely to impede the overall trend of cross-strait talks.

  First, between the end of 2003 and the beginning of this year, Taipei and Beijing reached a consensus on how to engage in trade talks, adopting "the Macau model," in which the private sector conducts negotiations under government supervision. They are using this model to negotiate charter flights and tourism-related issues, and successfully used it to complete talks on cross-strait direct charter flights during the Lunar New Year period this year.

  Second, in 2004 Taiwan proposed 18 principles to guide cross-strait talks on economic issues. In June last year, Taiwan overcame the negative impact of the Anti-Secession Law by making a number of proposals on cross-strait trade talks.

  Meanwhile, following the passage of the law, Beijing expected to expand the scale of cross-strait exchanges and cooperation on the economic front, in order to boost China's economic development and stabilize cross-strait relations.

  If both Taipei and Beijing can reach an agreement on direct passenger and cargo charter flights and the entry of Chinese tourists into Taiwan this year, it is likely that both sides will make further progress in negotiations on other economic issues, thereby pushing cross-strait relations into a new phase.

  Tung Chen-yuan is an assistant professor at the Sun Yat-sen Graduate Institute of Social Sciences and Humanities at National Chengchi University.

  Translated by Daniel Cheng
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