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Old April 23rd, 2004, 05:44 AM   #1
hkskyline
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CN/HK/TW | Cross Strait Aviation News

Friday April 23, 2004

U.S. Encourages Cross-Strait Trade, Transport Links: Official

WASHINGTON, April 22 Asia Pulse - The United States encourages both sides of the Taiwan Strait to engage in direct trade, postal and transportation links, as it will be a win-win situation for the two sides to step up economic exchanges, a United States official said Wednesday.

James A. Kelly, assistant secretary of state for East Asia and Pacific Affairs, made the remarks at a hearing on the 25th anniversary of the Taiwan Relations Act at the House International Relations Committee.

Kelly said the reasons Taiwan hesitates to implement cross-strait direct links may include worries that overreliance on the mainland could potentially produce a crisis. In addition, Taiwan also worries that direct links could speed up the outflow of Taiwan industry, worsening its unemployment problem.

Though it is not completely unfounded that Taiwan worries about the hollowing out of its industry, Kelly said Taiwan should also see the issue in a broader perspective. Cross-strait trade is not conducted in a vacuum, but is part of global trade, and the world economy is in nature interdependent, he added.

He pointed out that 25 per cent of Taiwan's exported products go to the mainland, and a great majority of those products then go from the mainland to the world after assembly.

Kelly said that the reason that Beijing authorities dare not impose economic sanctions on Taiwan is because if a crisis develops across the Taiwan Strait, the damage to the mainland may be as bad as to Taiwan, and this is why mainland China fired missiles in waters off Taiwan between 1995 and 1996, but dared not impose economic sanction on Taiwan.

Taiwan has a sound economic structure, trade policies, solid economic basis, good educational system, a dynamic industrial structure based mainly on small- and medium-sized enterprises. and it is currently moving toward the areas of biotechnology, optoelectronics and nanotechnlogy, he added.

But Kelly also urged Taiwan to conduct financial reforms, improve the investment environment, and implement its pledges made before entering the World Trade Organization, saying that Taiwan has much room for improvement in the area of the protection of intellectual property rights.

(CNA)

Context

Since 1949, no direct flights have been allowed between China and Taiwan. Passengers on both sides must transfer planes through a 3rd destination, usually Hong Kong. As a result, the Hong Kong-Taipei route is heavily travelled by Taiwanese businessmen, and is a major revenue source for Cathay Pacific and Dragonair. Talks between China and Taiwan have stalled on inaugurating direct flights, which will have major percussions on the aviation market in the Greater China region.
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Old May 6th, 2004, 06:43 AM   #2
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it will be great if Taiwan can restablish transport links with the Mainland. It will reduce
cost and travel time. Currently, Taiwan's transport link with the mainland is via Hong Kong.
 
Old May 6th, 2004, 07:04 AM   #3
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China Airlines had a flight to Shanghai via a stopover in Hong Kong during Chinese New Year 2003 but recent tensions have stalled any further talks on direct links.
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Old May 6th, 2004, 07:06 AM   #4
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I wonder what the impact will be like should there be direct triple cross-straight links.....
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Old May 6th, 2004, 04:30 PM   #5
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Given the present political tensions that's not likely to happen even in the long term (5 years).
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Old May 6th, 2004, 04:38 PM   #6
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The question is what happens if it do happen. Not when it will happen.

Any predictions anyone?
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Old May 6th, 2004, 04:39 PM   #7
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No more Hongkong stopover???
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Old May 6th, 2004, 05:10 PM   #8
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Direct Cross-Strait-Links would do good for all Chinese. I hope the halted dialogues between the mainland and the island will resume again very soon.
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Old May 6th, 2004, 09:11 PM   #9
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There will be a boom in flights between mainland and Taiwan, although it's a waste of time to analyze the impact to all sorts of detail when it's not going to happen in the formidable future. It's like coming up with a detailed plan to address what happens when it rains frogs.

Currently a lot of airlines fly between Hong Kong & Macau and Taiwan. Capacity might be reduced if direct links take place, but the airlines are well diversified to take the hit, if it happens. Since Hong Kong accounts for half of China's FDI and a major base for Chinese investment, demand for capacity will still be there.
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Old May 6th, 2004, 09:26 PM   #10
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Quote:
Originally Posted by YelloPerilo
Direct Cross-Strait-Links would do good for all Chinese. I hope the halted dialogues between the mainland and the island will resume again very soon.
It is perhaps "ideal" to think for the good of all, but so long that people choose to look inwards instead of outwards, I dont think there would be much progress?

And I dont think anyone is particularly interested in giving up a monstrous chunk of their traffic flow "for the common good!"
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Old May 6th, 2004, 09:48 PM   #11
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Politics often ignore the notion of the common good. A lot bickering comes from an overdose of ego coupled with a power struggle for domination. The old rivalries between the Communists and Nationalists will always lurk in the shadows in any negotiation. China's position is firm, and so is Taiwan's, yet how can there be a consensus? There almost was one last year.

However, consider the geopolitical implications of such a pact. If direct links are approved, then that signals a defeated government that fled to the island of Taiwan can successfully bargain an economic settlement with Communist China - the victor - amidst talks of separation. So logically speaking, why should the communists give the Taiwanese an economic benefit when they can't accept their political defeat?

Just some thoughts to ponder over. Sure, people will benefit if direct links take place, but politics will get in the way. Welcome to international diplomacy.
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Last edited by hkskyline; May 6th, 2004 at 09:57 PM.
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Old May 6th, 2004, 10:13 PM   #12
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As far as history has revealed, it was the Kuomintang which severed the 3 links with Mainland China, for a whole host of reasons, and if contemporary politics were to go by, all evidence points to the Mainland Chinese hoping that the links will be restored.

A restoration of links is beneficial for both China and Taiwan, and can hardly be considered to be a victory for either one party in the economical sense. If one wants to see things in a political way, then China knows, that it is equally in its immense benefit that should there be free flow of trade, the economy of Taiwan will become even more intertwined with that of Mainland China, and this can become its best tool for political negotiation into the far future.

The Taiwanese government is fearful of this potential threat which China seems to be trying to exploit, and hence they have more reason to stall the talks then China does rather then scoring "political points." If anything, the PRC govt looks set to shifting its means of conducting cross-straits diplomacy by finally considering the possibility of entering negotiations with them on an equal footing, as recent news has mentioned.

Welcome to the Reality of International Diplomacy.
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Old May 7th, 2004, 02:08 AM   #13
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The Taiwanese are fearful of economic dependence on China, yet realizing there is a huge pool of cheap labour and investment opportunities that are not worth ignoring. The present Taiwanese regime is pre-occupied with independence, while mainland China has stood on the sidelines. However, if anything funny arises, China will act, as they did back in the 1990s when they launched military exercises while the Taiwanese election campaign rolled along. China, on the other hand, would not suffer as badly if Taiwanese money stopped flowing in, but Taiwanese firms will bleed badly if they are shut out of China.

Both sides acknowledge direct links are a good thing, but politics always get in the way of a solution. After all, it has been over 50 years and relations have been frosty at times. The Hong Kong experiment is a clear example China wants to make to Taiwan as an olive branch. Meanwhile, the Taiwanese people elect a separatist. Then China issues an ultimatum threatening Taiwan. Who's more eager? Anyone can successfully argue for either side.

Politically, anything that smells like integrating with Communist China is the end of the world for the Nationalists.

Hence direct links will be on the agenda for years to come. Nothing much will move in the near term while the mess with the Taiwanese elections gets sorted out.

Note that even with the breakthrough China Airlines flight to Shanghai in 2003, the plane actually stopped in Hong Kong before continuing to Taiwan.
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Old May 7th, 2004, 07:11 PM   #14
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I suppose you are assuming that the political situation in China and Taiwan and between them will remain static for "years to come?"

5 years is not a long time, btw.
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Old May 8th, 2004, 02:20 AM   #15
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Reunification will not be possible in 5 years. Maybe a few decades is more feasible. Given the tensions from recent elections perhaps it'll take a friendlier Taiwanese president to make some headway.

However, a lot can happen in 5 years. Afghanistan became the spotlight of the world days after 9/11.
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Old May 8th, 2004, 02:23 AM   #16
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The first para says squarely that there will be no reunification.

The second para suggests there might be.

???
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Old May 8th, 2004, 02:39 AM   #17
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No, the first indicates reunification is hard. The second says a lot can happen. A lot can happen but that doesn't mean reunification will be one of them. Relations have suddenly gone sour this year while last year China Airlines did fly to Shanghai last year.
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Old May 8th, 2004, 02:53 AM   #18
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So if reunification can be hard, but at the same time, it can happen, then what is the gist of the whole thing?

And anyway, they dont really need political reunification for the three links to be resumed, do they?
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Old May 8th, 2004, 03:09 AM   #19
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Just because it can happen doesn't mean it'll be easy to get there. Both sides must get along first before they can negotiate. They might not have to unify to fly between each other, but they better be on good terms for that to happen.
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Old May 8th, 2004, 03:17 AM   #20
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Quote:
Originally Posted by hkskyline
but they better be on good terms for that to happen.
That sounds almost like a nanny telling them how to handle their political affairs!
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