How SARS Adds to Cross-Straits Tension


By Bruce Einhorn While Taiwan was initially spared the worst of the SARS outbreak, the island has suffered from a surge in cases since late April. Now, it has joined the other members of Greater China -- Hong Kong and China itself -- at the top of the list of hotspots for severe acute respiratory syndrome. Taiwan's Health Minister resigned on Friday, May 16, and three more deaths were

reported on Sunday, May 18, along with 36 new cases.

The Taiwanese government of President Chen Shui-bian is struggling to contain the epidemic, going so far as to forbid any noncitizen to travel from China or Hong Kong to the island nation. But Taipei is also trying to advance its diplomatic agenda and break out of its international isolation. Taiwan wants to join the World Health Organization, which is having its annual assembly in Geneva, Switzerland, starting May 19, and it's hoping that worries over SARS will convince WHO members to defy Beijing's opposition and allow Taipei to join or become an "observer."

BusinessWeek Hong Kong Correspondent Bruce Einhorn recently spoke with Tsai Eng-wen, chairperson of Taiwan's Mainland Affairs Council, about SARS and the impact it's having on relations between Taiwan and its giant neighbor. Edited excerpts of their conversation follow:

Q: How severe is the short-term effect on cross-straits relations?

A: The flow of people has been reduced to one-tenth of the normal flow, and exchanges between both sides have been reduced to the minimum. I imagine this will continue for a while. Our hope is we'll be able to get this under control in a few weeks.

Q: What are the chances of lifting the ban on noncitizens traveling to Taiwan from China and Hong Kong?

A: The initial period was for two weeks, starting from Apr. 20. Then we extended that for another two weeks. We don't know whether we'll have another extension on May 26. We're considering adjusting the current border-control measures so they'll be less disruptive to business travelers. We'll probably make it easier for them to come and go without too much concern about quarantine restrictions. Concrete measures should be announced in a short while.

Q: What will the long-term impact of SARS be?

A: In the last few years, people have tended to be rather optimistic about Chinese economic development, with the hope that China would be able to improve its political structure. But the regime isn't transparent enough. This disease makes people less optimistic -- it exposes a lot of problems in China. I would guess people will be more realistic about China these days, less confident.

Q: Will the SARS outbreak affect lifting the ban on direct transportation links between Taiwan and the mainland?

A: Some people here are concerned that if we allow direct links, diseases that have originated in China will be transmitted here more directly and quickly. We have to wait and see whether China can persuade us that it has a competent authority that can control disease and other risks before we can justify direct links or closer risks.

Q: So this is a new condition that has to be met before links can be established?

A: It's not really a condition. When looking at the pros and cons of direct links, the issue of disease is already covered in our assessment. It's just that the weight given to these matters is greater than before.

Q: How much have Taiwanese invested in China?

A: The official figure -- the amount of investment registered with authorities here -- is $32 billion. But our assessment, after tracing the capital flows, is that the actual investment in China is around $60 billion.

Q: Do you think SARS will drive Taiwanese companies from the mainland?

A: Our business people have to reassess the risk of doing business in China. Discussions are already under way about diversifying the risk, setting up production facilities somewhere else, for instance in Europe. Of course, China offers cheaper labor and cheaper land, so setting up production capability in China would help the competitiveness of our businesspeople.

You can't put all your eggs in one basket, though. We're trying to tell our people they have to assess the risks and find alternative production capability elsewhere. The government here understands why Taiwanese investors and producers set up production in China. But we're trying to tell them they need to be realistic.

Q: Your government is lobbying hard to become a member or an observer of the WHO. What's your view on Beijing's opposition?

A: The way they have dealt with it was bad. Their reason for blocking our entry is totally unacceptable to us. If you condition our entry into that organization upon the political principle of one China, it's absolutely ridiculous. The globalization and technology development of today have made national borders much less important than before.

Q: Why is it so important to be part of the WHO?

A: There's a problem associated with information flow. We don't have direct access to WHO information, and vice-versa. That may be the reason the WHO may not have had an accurate assessment of the situation [with SARS in Taiwan]. We're looking for meaningful participation in that organization. Of course, we would like to be a regular member.

Q: You admit, though, that there's a political angle, too.

A: This is functional organization, not a political institution. When we're looking for participation in a functional organization such as this, we're looking at the health problems we're facing. Of course, there may be symbolic meaning. But there's nothing wrong with it. We have the right and need to speak for ourselves.

Q: What are the chances of that happening?

A: Apparently, the pressure from other countries this year is greater than before, so our chance may be better, but I'm not sure how much better. This is critical to the health of the 23 million people here.

People should not be using political reasons to stop us from participating in this rather important organization. We have the right and need to speak for ourselves in the international community, especially in an important organization like the WHO. Einhorn is Hong Kong based correspondent for BusinessWeek. Follow his column, every Monday on BW Online


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