The understanding reached yesterday between China and Taiwan over the establishment of direct shipping links broke an 18-month-long deadlock and helped set the stage for further negotiations between the two sides, analysts said. The deal was also a minor political victory for Beijing as it signalled a small step forward in breaking Taiwan's four-decade 'three nos' policy banning direct transport, communication and trade links with the mainland. Taiwan Economic Affairs Minister Wang Chih-kang said that from a purely economic standpoint, transshipment services between China and Taiwan would help reduce costs for both sides. The minister termed the deal a positive development. You Fang-lai, director of the Kaohsiung Harbour Bureau, was pleased with the potential for increasing business when transshipment services begin. 'This is a major breakthrough for Kaohsiung harbour,' Mr You said on television. 'We're all ready.' Shippers in Taiwan, especially owners of small and medium-sized fleets, will also benefit from the opening of new cross-strait transshipment services. 'It's symbolically significant,' said Peter Kurz, branch manager of ING Barings in Taipei. Companies from the two sides will start applying to their respective cross-strait shipping associations for certification. They will then be able to apply to their governments for final approval. Dr Timothy Wong Ka-ying of the Chinese University in Hong Kong said the meeting yesterday reflected the 'willingness and good faith' of both sides. But he said a number of technical issues still had to be resolved. Dr Wong said another implication was how both sides handled the issue of Hong Kong after July 1. The political sensitivity of the issue was also highlighted by representatives yesterday when those from China maintained that the consensus reached was part of negotiations towards direct cross-strait communication. But Taiwan delegates insisted the talks were strictly limited to the establishment of an offshore transshipment centre. A former official with Taiwan's Mainland Affairs Council said setting up cross-strait transshipment services would be a mutually beneficial arrangement, although the mainland would benefit more than Taiwan.