Posted by: Dexter Roberts on December 15, 2008
It’s a big day for cross-Straits relations. Ending an almost 60-year-old ban on direct links that date back to the civil war between the Chinese Communists and Taiwan’s KMT Party, beginning today Taiwan and the mainland are allowing direct trade, transport, and postal links—what the Chinese call “three direct links.”
And it’s long overdue: over the last twenty years, economic relations between the former enemies have soared. Today more than 750,000 Taiwanese live and work on the mainland, having invested tens of billions of dollars. Trade is expected to soon reach $100 billion, with Taiwanese electronics components, as well as fruit, vegetables, and fish flowing, to the mainland, and raw materials traveling the other way. The restrictions have forced people and goods moving across the 160-kilometer-wide Straits to make costly diversions through Hong Kong, Macao and Okinawa. Both sides are estimating that direct links will mean around $100 million a year in savings.
I am on the first direct daily flight from Beijing to Taipei. Starting in July they have had several charter flights a week between these two cities, but this is the first that isn’t diverting over Hong Kong airspace, and instead is taking the 1580-kilometer, 984-mile direct route, and thus shaving about an hour and a half off the flight time, and getting me to Taipei in under three hours. I am flying China Air—the Taiwanese carrier. My fellow passengers (the plane is only about half full) appear to be a mix of Taiwanese and mainland business people, as well as Taiwanese families heading home for the holidays.
The trip has a small personal significance for me too: it was 20 years ago this year—in 1988—when I first flew into Taipei from San Francisco. I was fresh out of college and ready to continue my Mandarin language studies in Taiwan, then the most popular option for young people eager to learn Chinese. That visit I spent my first night in an overcrowded YWCA hotel. The friendly staff pushed a ping pong table out a small recreation room to make room for me, and wheeled in a small cot for me to sleep on. This time I have a more comfortable hotel room waiting for me, and am visiting on a reporting trip to better understand the evolving Taiwan-China economic relationship.
Starting from today, China and Taiwan will see 16 daily flights from 21 mainland and eight Taiwanese cities including Beijing, Shanghai and Taipei, but also Hangzhou, Shenzhen, and Dalian, direct shipping between cities including Tianjin, Shanghai, and Kaohsiung and Keelung in Taiwan, and direct postal links between five Taiwanese and eight mainland cities.
The direct links could prove a valuable boost to both sides’ economies, an outcome that would certainly be much welcomed. Already signs of a slowing economy are rampant on the mainland. New shopping malls in the capital have little foot traffic. In the south of China, tens of thousands of export-oriented factories—many of them owned by Taiwanese business people—are going bankrupt as overseas sales dry up and costs rise, throwing millions of migrant workers out of work. And the gleaming new Beijing Airport Terminal Three—the world’s largest—is alarmingly empty. As I wait for the plane in the long terminal, the afternoon sun shines on rows of empty waiting hall seats; and the automated walkways continue to run even without foot traffic.
When we land at Taipei’s Taoyuan Airport, I realize we have a senior mainland transport official on board too; a phalanx of photographers appear, pulling off numerous shots of the disembarking official, all the while doing their nimble back-stepping, flashes popping, in the arrival hall. And on the flight over too, I saw evidence of the perceived importance of the new links—both the Chinese and Taiwanese papers provided led with news of the direct flights, shipping and mail. Now it remains to be seen whether they prove as effective as all the press attention has suggested—and help boost the slowing China and Taiwanese economies.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.