THERE is every possibility that direct shipping links between China and Taiwan will resume by the second quarter of next year. In January, Taipei made a landmark decision to allow direct shipping with the mainland - a link that has been banned since 1949. To begin with, Taiwan has proposed to set up an offshore transshipment centre at its southern port of Kaohsiung as part of its plan to transform the country into an Asia-Pacific business hub. Following the announcement, Taiwan's Evergreen Marine Corp ordered 10 feeder ships of 1,162 teus each from Japan's Hayashikane Dockyard - three for itself and seven for affiliate Uniglory Marine Corp. Ordered in March, the first of these vessels will be delivered in May next year. Hong Kong shipping executives expect Evergreen to deploy its ships on routes between Taiwan and China to connect with its deep-sea vessels which operate between Asia, North America and Europe. Uniglory will phase its ships into the existing fleet, allowing some older vessels to be retired. Uniglory operates on several intra-Asian routes, as well as those linking Asia with the Middle East, South Africa and South America. After the orders were placed, Chen Zongbiao, president of the China Ocean Shipping Co (COSCO), said his company was looking for Taiwanese interests to set up a joint venture to operate services across the Taiwan Strait. He made the announcement in Taipei last month after attending the preparatory meeting for a conference of Asian Shipowners Forum, scheduled to be held in the Taiwanese capital in May. Informed sources say the Taiwanese partners are likely to be Evergreen and Uniglory, most of whose ships are registered under foreign flags. At present, Taipei does not allow Taiwan-registered ships to sail to the mainland, but has decided to allow all foreign vessels and foreign-flagged Taiwanese ships to sail directly across the strait. Also last month, Taiwan's Transport and Communications Minister Liu Chao-shiuan said the country's five international ports would open to foreign vessels and Taiwan ships flagged abroad, which have travelled directly from the mainland. 'We are making the necessary arrangements for this measure, which will be the first step of our shipping link with the mainland,' Mr Liu said. He said the second step would involve permitting Taiwanese vessels to visit the mainland, and the final step would be clearance for Chinese vessels to visit Taiwan. But so far, Taipei's decision has not caused any sleepless nights for Hong Kong's container port operators. Officials at Hong Kong International Terminals (HIT) and Modern Terminals (MTL), the territory's two largest terminal operators, said the impact on Hong Kong would be minimal. Beijing is yet to respond to the proposal, although official media have reported that China is ready and waiting to implement direct postal, air and shipping links. But Zhang Dachun, president of the COSCO (Hong Kong) Group, said that routes between Taiwan and China would be treated as 'domestic' and foreign lines would be barred from operating them. 'These are within the domain of internal affairs of the Chinese people and have no room for interference by foreigners,' he told shippers at a seminar organised by Hong Kong-based pro-Beijing Ta Kung Pao newspaper last month. Mr Zhang's remarks followed those of a Taipei official who had said earlier that Beijing had no reason not to co-operate with Taiwan's plan to set up an offshore transshipment zone for cross-strait traffic. Currently, the Taiwan to China transshipment trade accounts for about four per cent of Hong Kong's transshipment business and about one per cent of the territory's total cargo throughput, which was more than 11 million teus last year. About 15 to 20 per cent of this is transshipment cargo, down from 40 per cent in the 1970s.