Source: European Chamber of Commerce Taipei
The following are remarks by Dr. Shin-Yuan Lai, Minister of Taiwan's Mainland Affairs Council, at the Sherwood Hotel:
Mr. Pellegrin, Mr. Wittich, Friends from Europe, Ladies and Gentlemen,
A very good day to you all!
I am honored and delighted to attend this monthly luncheon hosted by the European Chamber of Commerce Taipei (ECCT). The ECCT has long served as a bridge for communication between European business investors in Taiwan and our government. Your annual position papers have always provided valuable and concrete suggestions on our government’s policy implementation, especially in respect of cross-strait policy. Those suggestions have been a key influence in our efforts to improve Taiwan’s investment environment and raise Taiwan’s all-round competitiveness. I would like to take this opportunity not only to express my gratitude to you, but also to assure you that our government will always attach importance to your suggestions and act upon them appropriately.
Since the new administration took office on May 20 last year, cross-strait relations have acquired an entirely new face. Our government has taken a new approach to formulating cross-strait policy, and has achieved enormous progress in promoting cross-strait relations.
In his inaugural address, President Ma expressed the hope that the two sides of the Taiwan Strait could grasp the historic opportunity to achieve peace and co-prosperity. He called for both sides to “face reality, pioneer a new future, shelve controversies, and pursue a win-win solution,” to strike a balance in pursuit of common interests. His words resoundingly demonstrated the new government’s earnest commitment toward the positive development of cross-strait relations.
The essence of our new government’s cross-strait policy is to act with a globalistic mindset in pursuing the normalization of cross-strait relations and striving for peace and development across the Taiwan Strait. We understand that countries throughout the Asia-Pacific, and indeed throughout the world, share a common desire for peace, stability and shared prosperity in the development of our region. To fulfill Taiwan’s obligations as a responsible member of the international community, we will do our utmost to improve cross-strait relations, maintain peace and stability in the Taiwan Strait, and create conditions for co-prosperous regional development. In so doing, we will abide by the principle of “putting Taiwan first for the benefit of the people” and adhere to the preconditions of “no unification, no independence, and no use of force” and the maintenance of the status quo.
We also recognize that the conditions are not currently in place for finding an immediate solution to the sovereignty dispute between the two sides of the Taiwan Strait. Hence, we advocate that the two sides should step aside from needless political controversies, pragmatically face the cross-strait status quo, and focus on working through the cross-strait institutionalized negotiation channel to first solve problems stemming from all kinds of economic, trade, cultural, social and other cross-strait interaction that affect the interests of the people on either side of the Strait, particularly issues in the economic sphere that affect the people’s livelihood.
We are fully aware of the ever increasing closeness of cross-strait economic and trade links. Over the past eight years, cross-strait trade has grown nearly threefold. In 2007, it amounted to 130.2 billion US dollars, accounting for 28 percent of our worldwide foreign trade. The export portion of that cross-strait trade was worth 100.4 billion US dollars, yielding a surplus in our favor of 70.6 billion US dollars, and making up 40.7 percent of our total exports.
With Taiwan’s businesses having invested a cumulative total of more than 74.4 billion US dollars in the Mainland, the Mainland is already our primary trade partner, primary export market, primary trade surplus source, and primary business investment destination. Faced with such closeness of cross-strait economic and trade relations, our government has a responsibility to adjust the unreasonable restrictions created by the previous regulatory policies such as “No haste, be patient” and “active management,” and to resolve the wide range of problems in order that cross-strait economic and trade relations can advance toward normalization.
Therefore, since May 20 of last year, the new administration has first and foremost prioritized the policy goals of restoring cross-strait talks and pursuing the normalization of cross-strait economic and trade relations.
Immediately after taking office, we revived the institutionalized channel for cross-strait talks that had been cut off for nearly a decade. The Straits Exchange Foundation (SEF) and the Association for Relations Across the Taiwan Strait (ARATS) held two rounds of high-level talks, on June 13 and November 4 of last year, at which they signed six agreements covering weekend charter flights, Mainland tourist visits to Taiwan, direct cross-strait air and sea transport, postal cooperation, and food safety. Just a month ago, on December 15, three direct links were all simultaneously launched, bringing to realization the direct cross-strait sea and air links that had been eagerly awaited in all quarters for many years. With this step, we met a key condition for restoring Taiwan’s strategic position in the regional economy of the Asia-Pacific, and strengthening our economy’s connection with international markets.
Direct cross-strait sea and air transport translates into tangible economic benefits for Taiwan. These include:
─ On the air transport side, direct air link means that cross-strait flights no longer have to take a roundabout route via the Hong Kong flight information region. This greatly enhances the convenience of cross-strait travel for people on both sides of the Strait, and greatly shortens the time of flights. To take the most intensively used cross-strait flight from Taoyuan to Shanghai as an example, the inauguration of weekend charter flights had already reduced the one-way journey time from around 5 hours to 2 hours and 24 minutes, and the direct air route has further shortened it to just 1 hour and 22 minutes, saving a further 62 minutes on each journey. This will cut fuel costs by 45 percent and translate into an annual saving of at least 3 billion NT dollars for passengers and airlines.
─ After the opening of direct shipping, vessels no longer need to sail via a third territory, saving on average approximately 16-27 hours per voyage across the Strait. This can cut shipping costs by between 15 and 30 percent. At the current cross-strait container traffic level of 4,000 sailings per year, this translates into an annual saving of at least 1.2 billion NT dollars. These are all immediately realizable economic benefits.
In addition to these developments, the new government has been taking continuous steps to loosen and adjust cross-strait economic and trade policy. In the past eight months, we have carried out measures to normalize the “Mini-Three-Link” made the renminbi convertible in Taiwan, instituted relaxation measures concerning cross-strait securities, relaxed the restrictions on Mainland-bound investments , opened the way for foreign enterprises and overseas Taiwanese businesses to return to Taiwan for a primary or secondary public listing, and allowed mainland Chinese QDIIs (qualified domestic institutional investors) to invest in Taiwan’s stock market.
Direct sea and air links combined with these economic and trade related liberalizations not only serve to greatly reduce cross-strait transport costs for people and goods, but also contribute to the division of labor and positioning of cross-strait industry, and re-establish Taiwan’s strategic advantages in the economies of the Asian and Asia-Pacific regions. As a result, Taiwan is much better positioned to become an Asia-Pacific regional operations center for transnational enterprises and a global operating headquarters for Taiwanese businesses, and the international competitiveness of Taiwan’s economy is substantially enhanced.
Public opinion polls show that the majority of Taiwanese people approve of the recent conciliation and stabilization of cross-strait relations, and support the new government’s approach to conducting cross-strait affairs “for the benefit of the people.” The polls show that 70~80 percent of the people are pleased with the four cross-strait agreements concluded last November. Countries throughout the international community, including such important friends of ours as the United States, the EU, Japan, and Singapore, have welcomed and expressed high praise for the improvement of the cross-strait situation and the buttressing of peace and collective security in our region. It is fair to say that the situation in the Taiwan Strait and cross-strait relations have entered into an unprecedented new stage.
Looking back at the development of cross-strait relations over the past eight months, our efforts have already written a new page in the history of those relations, and have achieved the optimum application of “facing reality and mutual non-denial.”
The two rounds of high-level talks between the SEF and ARATS, in Beijing on June 13 and in Taipei on November 4, were especially significant, with Chen Yunlin’s visit to Taiwan being the first by an ARATS chairman since that organization was founded 17 years ago, and the first visit to Taiwan by the highest-ranking representative of the Mainland government during the six-decade political division between the two sides of the Taiwan Strait. The talks were held on an equal footing, once on each side of the Strait, with each side’s delegates crossing over to visit the other. At the second round of talks in Taipei, high-level representatives of government agencies on each side engaged in direct discussion and interaction with one another. President Ma and I received visits from the ARATS chairman and key members of his delegation.
Such arrangements demonstrated to the world that the two sides of the Strait are committed to “facing reality and mutual non-denial,” to pursue negotiation in place of confrontation, to seek reconciliation in place of conflict, and to jointly strive for peaceful development and co-prosperity. Besides the institutionalized negotiation mechanism that is up and running again, the two sides have also established diverse and extensive communication mechanisms, to enable us to promptly contact and communicate with each other to solve all kinds of problems stemming from all aspects of cross-strait interaction and the implementation of cross-strait agreements. Such close interaction has not been seen for decades past, and is a vital cornerstone for building the normalization of cross-strait relations.
In the year ahead, we will continue to pursue institutionalized cross-strait talks on the basis that is already in place. The problems stemming from cross-strait exchanges are broad and complex. To effectively handle and solve these problems, we need to build up our experience step by step, and expand our achievements bit by bit. We will stick in principle to tackling the easy issues before the difficult ones, the urgent before the non-pressing, and the economic before the political.
During the second round of Chiang-Chen talks, the two sides discussed the prioritization of issues for the third round of negotiation, and agreed on 20 issues that should be covered in the following talks. These include:
- The arrangement of regularly scheduled flights.
- Cross-strait financial issues such as signing memoranda on banking, securities and futures supervision, and establishing a currency settlement mechanism.
- Cross-strait economic and trade issues concerning the rights and interests of Taiwanese business investors in the Mainland, such as an investment protection agreement, avoidance of double taxation , an economic and trade dispute-resolution mechanism, cooperation on standards, testing and certification, and IPR protection.
- Issues concerning the order of cross-strait exchanges, such as joint efforts to combat crime, expanding food and health safety cooperation, and establishing an epidemic reporting mechanism.
- Other issues, such as mainland Chinese capital investment in Taiwan, quarantine and inspection of farm products, cooperation on fishing industry labor affairs, handling of fishery disputes, and news, cultural and educational exchanges.
Both sides are undertaking preparatory work for negotiation on the above-mentioned issues, and personnel from the relevant bodies have already conducted preliminary exchanges of views on some of the issues. We have now begun actively preparing for agreements that may be reached at the third round of Chiang-Chen talks, including those on finance-related issues, cross-strait crime fighting, regular flight schedules, and matters concerning Taiwanese business investors in the Mainland, which are listed as the top priorities on the agenda, and we hope that such agreements can be concluded and signed at the next meeting of the SEF and ARATS chairmen.
At the same time, we will continue to review and relax cross-strait policy to reflect the new cross-strait situation, and will carry out measures pertinent to cross-strait economic and trade normalization, to match the progress of cross-strait talks. This will include reviewing prohibitions on investment in the Mainland, permitting mainland Chinese capital investment in Taiwan, and relaxing restrictions on visits to Taiwan by Mainland technical, professional and business personnel – the last being an issue that has long figured high on the ECCT’s wish list of suggested regulatory deregulations. These steps will move us further toward building a more liberalized and internationalized investment and business operating environment in Taiwan, enabling the development of cross-strait economic and trade links to pump fresh vitality into Taiwan’s economy, and attracting more foreign businesses and transnational firms to invest in Taiwan.
In face of the rapidly changing international situation and mainland China’s rise, the government of the Republic of China on Taiwan will continue to carry out its Mainland policy in an active and steady manner. Amid the tide of globalization, Taiwan cannot cut itself off from dealings with mainland China.
At the present stage of cross-strait relations, we can no longer treat the Mainland as simply a threat, but must also regard it as a source of potential opportunity. In the future, our government will act on the principle of “minimizing the threat and maximizing the opporunity.” Taking account of overall national policy direction, operative facets of globalization, and the will of the people, we will continue conducting dynamic adjustment of cross-strait opening policy, to lay sound foundations for Taiwan’s survival and sustainable development.
In the course of cross-strait interaction, we will also seek greater recognition and support internationally. Cross-strait relations are extremely complex, and differences in the political positions on either side of the Taiwan Strait are not at all easy to resolve properly within the short term. Therefore, as we proceed with improving our relations with the Mainland in the future, we will also seek broader recognition and support from all members of the international community, including the US, Japan and the EU. We hope that the relevant countries also can play a positive and active role in cross-strait interaction.
With cross-strait relations having been put back on track in the past eight months, those relations have now reached a hard-to-come-by point of historic opportunity. We have optimistic expectations for the future development of cross-strait relations, and are intent on grasping the opportunity. Under the preconditions of safeguarding Taiwan’s sovereignty and the interests of all the people of our nation, we will continue to conduct our cross-strait policy with a view to creating a win-win outcome for both sides of the Strait, and creating more favorable conditions for peaceful cross-strait development and the collective security and prosperity of our region.
During many years of activity in Taiwan’s business sector, the ECCT and European firms have made a big contribution to Taiwan’s economic development. Now that this brand new situation in cross-strait relations has arisen, we hope that the chamber and its members will be able to join hands with our government and local firms in striving together to create new realms and a new era for Taiwan’s economic development.
In closing, let me wish every one of you the best of health, your hopes fulfilled, and success in all of your business endeavors. A happy Lunar New Year to you all.
Thank you!
