Beijing set to offer cross-strait trade deal

PUBLISHED : Wednesday, 20 April, 2005, 12:00am
UPDATED : Wednesday, 20 April, 2005, 12:00am

Leaders believe Cepa-style arrangement will win Taiwanese hearts, sources say

Beijing is set to open its markets to Taiwan in an arrangement similar to the Closer Economic Partnership Arrangement (Cepa) it struck with Hong Kong and Macau, according to informed sources.

The decision was reportedly based on a recent study by a taskforce led by Vice-Premier Wu Yi and Minister of Commerce Bo Xilai .

It is the latest move by Beijing to win the hearts of Taiwanese people, after the Lunar New Year charter flight arrangement and invitations for leaders of the island's opposition parties to visit the mainland.

Sources said it was part of an overall review of Beijing's cross-strait policy.

Cepa was implemented by Beijing in June 2003 to boost Hong Kong's ailing economy after Sars.

Sources said the success of Cepa in Hong Kong had prompted the leadership to extend it to Taiwan in a bid to reverse declining cross- straits relations.

One senior source said it would be more difficult to launch Cepa with Taiwan because the two sides of the strait had suspended official or semi-official contacts.

But the source said Beijing might push the idea during the visits of Taiwanese opposition leaders Lien Chan, of the Kuomintang, and James Soong Chu-yu, of the People First Party.

'If Beijing unilaterally makes these offers to help the Taiwanese economy and people, it puts the ruling party in a dilemma. Either they accept the offer and talk with Beijing under the Hong Kong and Macau model, or they reject the opportunity for closer economic links with the mainland.'

The source noted that Beijing would take a gradual approach in pushing ahead with the proposal, reviewing its moves step by step in order to achieve its aims of winning the support of the Taiwanese people, checking pro-independence forces and helping pro-unification parties.

The leadership believes that with its huge market, the mainland's fast-growing economy would be Beijing's biggest asset in cultivating cross-strait ties.

In line with Hong Kong's Cepa model, the arrangement with Taiwan would see the abolishment of tariffs for a list of goods agreed by the two sides. Companies in selected service sectors would also receive so-called 'national treatment' in both economies.

The taskforce study reportedly found that certain mainland industrial and agricultural sectors might have to make 'sacrifices'. But the assessment was that the mainland economy as a whole could bear such losses.