Monday, December 15, 2008

Three Links: Rewriting Cross-Strait Relations

Three Links: Rewriting Cross-Strait Relations
China Times editorial (Taipei, Taiwan, ROC)
A Translation
December 15, 2008

Direct cross-Strait links, or "da san tong" have been obstructed for nearly 50 years, and debated for nearly twenty years. Beginning today, direct cross-Strait links are official policy. This means the full implementation of direct air passenger, maritime shipping, and postal links. Maritime shipping will no longer need to go through a third destination. Weekend charter flights will be expanded to include daily charter flights. Cross-Strait mail will only require two-days to reach its destination. This is an historic moment. What kind of changes will direct cross-Strait links lead to? At the moment that remains hard to predict. But we can be sure private sector cross-Strait interaction will have far-reaching effects.

Take weekend charter flights. They have already been increased to 108 flights per week. It used to be difficult to get weekend charter flight tickets. That has all changed. Air routes have also been straightened out. It is no longer necessary to detour through the Hong Kong Flight Information Region. This substantially shortens flight times. Take for example, the most heavily traveled air route, the one between Taipei and Shanghai. It now takes only 83 minutes. It is now possible to attend a morning meeting in Shanghai and get return to Taipei by dinnertime. A "cross-Strait commute" will become a reality. This will yield immediate benefits, facilitating the return of Taiwan businessmen and mainland spouses to Taiwan during next month's Spring Festival. The traditional "Spring Festival Charter Flights" will be a thing of the past.

Of course, weekday charter flights are merely an extension of weekend charter flights. They cannot replace regularly scheduled flights. In fact, six to seven hundred flights between Taiwan, Hong Kong and Macao, and 108 weekday charter flights, are not enough to meet the demand. This will be one of the key points addressed at the secnd Chiang/Chen Meeting during the first half of next year. If all goes well, they will sign a formal agreement on regularly scheduled cross-Strait flights. For years, passengers on both sides of the Strait have been forced to detour through Hong Kong and Macao, or resort to the Kinmen-Xiamen mini three links. If the agreement is signed, these detours, and even charter flights, will be a thing of the past.

Maritime shipping detours have also had a negative impact. Beginning today, eleven Taiwan ports will be directly linked to 63 mainland ports. Ships will no longer have to detour through foreign ports. The savings in time and money will be considerable. Estimates are that 16 to 27 hours can be saved on each voyage, amounting to a savings of 15 to 30 percent in transportation costs. Based on current estimates of 4000 cross-Strait container ship voyages, this means a savings of at least 1.2 billion NT. Cross-Strait voyages are expected to increase dramatically, creating many more profit opportunities.

Cross-strait direct shipping will revolutionize cross-Strait economic and trade relations. Several ports will immediately experience a boom. These include Taipei, nearby Keelung, and Taichung, including Taichung Industrial Park. Even Kaohsiung can look forward to regaining its status as the world's largest capacity deep-water container port. According to preliminary estimates, cargo volume will increase 30 percent as a result of direct shipping. In particular, if Taiwan's ports become a southern China region container transhipment center, international shipping will also increase substantially. Do not underestimate the significance of this change. Taiwan's geographical location already gives it a competitive advantage. Taiwan may also be in the best position to become a regional transhipment center. In the past political obstacles deprived us of this unique opportunity. We must no longer pass it up.

The Republic of China has been politically isolated by the international community. It has suffered enough. If it is economically marginalized by the international community as well, then its circumstances will be even more dire. In two or three years, the East Asia free trade zone will gradually take shape. Many East Asian nations began planning long ago, formulating new trade strategies in response to new circumstances. While they were doing so, Taiwan remained trapped in a "no haste, be patient" quagmire, bickering endless over what constituted "effective management." Direct three links remained plans on paper. Add to this ideological quarrels, and who knows how much time was wasted, for no good reason. Manufacturers relocated, one after the other. Foreign operations pulled out. Taiwan's competitiveness declined. Now that the "da san tong" policy has finally been implemented, we truly are in a race against time.

The global financial crisis has plunged the world into economic recession. No one can guarantee that opening direct links will lead to immediate changes. After all, mainland China is also facing the same economic challenges. But at least this provides us with an opportunity. Financial and economic experts within the Cabinet, and industry leaders alike, are thinking about how to make use of this rare opportunity to renew their industrial competitiveness. The government is using the opportunity to expand both local and mainland demand, to attract foreign investors, and persuade foreign businessmen to establish operating headquarters on Taiwan, and to develop a regional operations center. Individual industries are thinking about regional deployment, how to establish new vertical and horizontal divisions of labor. Under "da san tong" these issues must be addressed as soon as possible.

中國時報  2008.12.15



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