Resisting China's charm offensive Rather than bringing unification closer, new economic ties solidify the status quo The Economist Nov 6th 2008 | TAIPEI http://www.economist.com/world/asia/displaystory.cfm?story_id=12570579 CHIANG PIN-KUNG, who heads the Straits Exchange Foundation (SEF), the body through which Taiwan talks to China, called it “a key moment” and a “ win-win economic situation”. The arrival in Taiwan on November 3rd of his mainland Chinese counterpart, Chen Yunlin, offered a ray of hope for the island’s faltering economy. Mr Chen, the highest-ranking visitor from China since the end of the civil war in 1949, came to sign a slew of business agreements. But for Taiwan’s president, Ma Ying-jeou, the visit was a gamble. Supporters of the opposition Democratic Progressive Party (DPP) dogged Mr Chen’s footsteps, with protests accusing Mr Ma of selling out to the Chinese. Thousands of police were deployed to control the demonstrators, but failed to stop them besieging Mr Chen during a banquet in Taipei. His meeting with Mr Ma was rescheduled to fox protesters. Last month Mr Chen’s deputy was assaulted by DPP activists in southern Taiwan. The DPP’s traditional support for formal independence helps explain China’s fondness for Mr Ma, of the Nationalist Party, or Kuomintang. Since he succeeded the DPP’s Chen Shui-bian in May, China has oozed charm. The latest agreements offer more substantial business ties than ever before. Most eye-catching is a big expansion of direct transport links. A new direct air route, avoiding Hong Kong’s airspace, will reduce travel time from Taiwan to Shanghai by over an hour, and save an estimated 40- 50% in fuel costs. Passenger charter flights, at present limited to 36 round-trips each weekend, are to become daily and increase to 108 a week. The number of flight destinations in China will increase to 21 from five, and there will be 60 round-trip charter cargo flights each month. There will also be new direct sea links, with 11 ports in Taiwan and 63 in China open to ships from the other side. All this should delight Taiwan’s businesses, which have long pushed for direct links. The government estimates that they have invested over $150 billion in China. But the absence of direct links marginalises Taiwan from global supply chains. Wang Lee-rong, of the Chung-Hua Institution for Economic Research, a semi-official think-tank, insists the agreements “are not only symbolic, but will have real impact.” They might help not just Taiwan and China, she says, but the regional economy as a whole. This appeals to Mr Ma at a time when his popularity is slumping, as Taiwan is battered by global financial turmoil. Despite the protests against Mr Chen’s visit, Andrew Yang, of the Chinese Council of Advanced Policy Studies, a think-tank, says most Taiwanese do not see the agreements as surrender to China. Mr Ma’s standing, he argues, depends on whether they can actually revitalise the economy. If global turmoil continues to drag down Taiwan’s economy, he says, it may stay in the doldrums. For China, the economic accords form part of a broader push to burnish its image in Taiwan. It has even employed one of its traditional courtship rituals by offering a Taiwan zoo a pair of giant pandas—popular with the public, though the Chen administration turned down an earlier offer. Despite the talk of warming ties, both sides have to walk on political eggshells. China cannot stomach anything that hints at separate statehood for Taiwan. So when he met Mr Ma on November 6th, Mr Chen could not bring himself to call him “president”. And Mr Ma, conscious that there is hardly any popular support in Taiwan for imminent unification with China, has also refrained from overtly political statements. Fudging the issue of Taiwan’s status, he has described its ties with China as “special relations between two regions”. He has argued that setting political differences aside will allow the two sides to build mutual trust. This, he hopes, may even lead to broader negotiations on lowering political and military tensions, where, as he reminded Mr Chen, the two sides “have their differences and challenges”. This week Lai Shin-yuan, of Taiwan’s advisory Mainland Affairs Council, said she had urged Mr Chen in a closed-door meeting to remove China’s military threat. She did not reveal his response. But Mr Ma’s avowed goal of a peace treaty seems distant. It would depend on China’s removing the estimated 1,400 missiles it has pointing at Taiwan, which China would not agree to do without a big reciprocal concession from Taiwan. And, unlike the economic talks, which can be handled through notionally “non-governmental” bodies, it would require direct official talks, with all the headaches that would entail. China, however, may be content with this impasse. In recent years, even during Chen Shui-bian’s rule, Chinese officials have shown far greater willingness to leave Taiwan be, as long as it resists any formal declaration of independence. The accords on cross-strait transportation give China’s leaders a chance to show hardline nationalists that their tactics are working. With President Hu Jintao and the prime minister, Wen Jiabao, constitutionally required to step down in 2013, they may be more than happy to leave solving the Taiwan puzzle to their successors. --

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