Trade ties with mainland not a cure-all, say analysts
Taiwan's President-elect, Ma Ying-jeou, has painted a rosy picture of cross-strait economic integration, believing it will be the panacea for the island's lacklustre economy.
But economists and officials yesterday warned there was not much Mr Ma could actually do to realise his goal, given that the ball was in the mainland's court.
Under Mr Ma's cross-strait economic package, the two sides would run direct flights, co-operate on tourism and relax investment restrictions on the mainland. A Taiwanese version of the Closer Economic Partnership Arrangement that Hong Kong has with the mainland would be signed and even a common market like that of Europe would be formed.
According to Mr Ma's timetable, right after his May 20 inauguration, he would announce the opening of seven airports across Taiwan for direct flights. He would also open seven ports, including Taipei and Kaohsiung, for direct shipping.
He would start weekend air charter services by July 1, and these would become daily by June next year.
Also by July 1, he would open the island to mainland tourists, initially allowing 3,000 a day to visit. He aimed to increase that to 3 million a year.
He would also ease the mainland investment cap which bars Taiwanese companies from investing more than 40 per cent of their net worth in mainland projects. He planned to allow mainlanders to put money into Taiwan's property, a move which would form part of his package to increase cross-strait economic exchanges and pave the way for the formation of Cepa and even a common market with the mainland.
Securities dealers said they expected the local stock market to open with a big bang today and all firms that have mainland investments were tipped to see limit-ups. 'It would not be a problem for the local index to surge at least 300 points,' said Wang Chih-min, investment director of Capital Securities.
Directly benefiting from Mr Ma's victory and his cross-strait package will be companies like China Airlines and Eva Air - two of Taiwan's major carriers, Evergreen and other shipping firms. Food giant Uni-President, petrochemical giant Formosa Plastics, Far Eastern Textile, Taiwan Semiconductor Manufacturing and United Microelectronics, which have mainland investments, were tipped to increase their business edge because of the new policy, dealers said.
Economists, however, noted that economic links should not be seen as the panacea to resolve the island's economic woes. 'It may be wishful thinking to rely on such a plan to resolve the economic problem,' economist Chen Po-chih said.
He said it had taken the European Union at least 50 years to develop to this stage, and the key was round after round of negotiations. Although Beijing might be more willing to deal with Mr Ma of the mainland-conciliatory Kuomintang, the party definitely would not yield in terms of political sovereignty, he said.
Tung Chen-yuan, vice-chairman of the Mainland Affairs Council, warned that the ball was in Beijing's court, and it was possible the mainland would make unreasonable demands before talks could be held.
Mainland analysts, however, were optimistic about a more open cross-strait economic link, saying Beijing would push forward policies that favoured the island's economy.
'The mainland authorities would be very co-operative in improving trade ties across the strait,' said Li Jiaquan , a researcher at the Chinese Academy of Social Sciences.
'It's very likely that the measures signed by [KMT honorary chairman] Lien Chan in the two cross-strait economic forums [held on the mainland] would materialise,' he said.
Shen Jiru from the World Economic and Political Institute in Beijing said the central government would welcome Mr Ma's offer for closer trade ties.
Making the crossing
Estimated number of Taiwanese that currently visit the mainland every year: 3m
