Taiwan-China trade flourishes despite ban

By Marcos Calo Medina

KAOTENG ISLAND, Taiwan (AP): A wooden Chinese fishing boat with sky blue paint flaking off its sides chugged up to a Taiwanese vessel. Fishermen tossed ropes to each other and pulled closer, setting up an illegal deal on the Taiwan Strait, just a few kilometers (miles) off China's southeastern coast.

Chen Shi-chong and his Taiwanese crewmate weren't buying heroin, handguns or other contraband as their boat bobbed in the water and coughed up acrid diesel exhaust. They were spending their Taiwan dollars on sea bass packed in ice and black garbage bags full of radishes, cabbages, garlic and onions.

Such a seemingly harmless deal is unlawful because for five decades Taiwan has banned direct trading and transportation ties with rival China, keeping the 130-kilometer-wide strait from being one of the world's busiest business zones. However, the ban may end soon.

Officials say the restrictions are necessary to keep Taiwan safe from China, which has threatened to attack since the two sides split amid civil war in 1949. But the fishermen who risk arrest daily are being joined by a growing number of lawmakers, professors and business leaders, who say opening direct links with the mainland wouldn't endanger Taiwan.

Chen's home on the outlying Taiwanese island chain of Matsu is closer to China than it is Taiwan. A 25-minute boat ride west would get him to the mainland, while it would take eight hours to get to Taiwan.

For Chen, it makes perfect sense to trade with his closest neighbor, and he resents having to sneak around this cluster of rocks called Kaoteng Island, five kilometers west of China.

"Smuggling is so difficult. If we had direct links with China, we wouldn't have to do all this cloak-and-dagger stuff," he said as his crew tied his boat to the bough of the wooden Chinese vessel, carrying the fish and vegetables still caked with mainland soil.

Policing the waterway, dotted with small rocky islets that provide perfect hideaways for smugglers, is difficult for the Taiwanese. Chen, who usually trades at night or early morning, agreed to take The Associated Press on a special daylight trip as long as it paid for boat fuel.

"Authorities generally look the other way. I just tell them I'm going out to sea," says Chen, waving his cap to his Chinese trading partner, Wei Jiazhong, from southern China's Fujian province.

Wei is also anxious for Taiwan to open up direct links. For the past decade, the government has allowed Taiwanese to do business on the mainland, but most of the roughly US$20 billion in China-Taiwan trade must flow through a third port of entry, such as Hong Kong.

"In a good week, I can make 20,000 Taiwan dollars ($645), but with direct trade things will get even better," says 27-year old Wei, his black jacket reeking of rancid seafood and diesel fumes.

Chen is pinning his hopes on a largely symbolic piece of legislation passed last month by Taiwan's legislature. The bill would open up the outlying Matsu, Kinmen and Penghu islands to direct trade with the mainland.

The bill does not automatically allow entry of mainland ships and aircraft, but Matsu's residents hope Taiwan's national government will eventually propose the necessary details to make the bill effective.

Perhaps the biggest motivation to open up direct ties is China's and Taiwan's expected admission, maybe this year, to the World Trade Organization (WTO). The WTO regulates global trade and its members are encouraged to maintain open business ties.

In some ways, opening direct trade ties with China wouldn't bring great change to the 3,000 people who live on the 18 islands that make up Matsu. They've been in close contact with the mainland for years.

Barely a pinprick on Taiwan's map, Matsu's Peikan island reflects the 51-year old ban's seeming irrelevance. Its downtown market overflows with fresh meat and livestock, even snake wine and herbal medicine from southern China.

Sometimes, China supplies even more than that.

"I once had to ferry a Chinese girl for one of my friends here and then take her back to China after a week," said Wang Chuan- ching, a 32-year old fisherman.

Matsu officials say once the ban is lifted, Taiwanese businessmen will capitalize on the islands' proximity to China and arrive in droves. Hotels would rise and airports and harbors would be expanded to handle heavier traffic.

"We want to be the next Hong Kong," says Tsao Yuan-chang, Matsu's first ever legislator.

Not so fast, says the government. National security would be threatened if Taiwan flings open its doors to China. It's a risk made all the more real by China's reported military buildup in the provinces closest to Taiwan, officials say.

Moreover, Taiwan runs a public health risk should contaminated livestock and untreated agricultural products flood in from the mainland -- where health and quarantine standards are markedly different from Taiwan's, the government says.

"We have to settle these details before we can open up direct links to any part of Taiwan," says James Chou of the Mainland Affairs Council, which handles Taiwan's cross-straits relations. "Right now its all wishful thinking."

It is money, however, and not missiles that grips the hearts of Matsu's residents, whose average monthly income of $680 is half that of Taiwan's.

"All this talk about national security is for the big guys. It's us, the little people, who get caught in the middle," says local councilor Hsieh Cheng-chun, 40, picking over a dinner plate of shrimp and braised pork ribs -- all from China.

Many analysts agree that the security risks are largely perceived. Taiwan's sophisticated U.S.-made radar and weapons systems could detect military aircraft and ships traveling under the guise of civilian transport.

"The military effect of lifting the ban is very small compared to the political or economic effect," says Sun Chin-ming, a retired major general. Sun is also an adviser to the Democratic Progressive Party, the political party of Taiwan's President- elect Chen Shui-bian, who has said he favors direct ties as long as Taiwan's defense is not compromised.

Taiwan is reluctant to open its doors to China because it's a step toward reunification, which for many Taiwanese means moving closer to giving up the self-rule they've enjoyed since 1949, said Arthur Ding, professor of international relations at Taipei's National Chengchi University.

"The problem is purely political," Ding said.

Nevertheless, the reluctance to reopen talks works on both sides of the narrow Taiwan straits. Despite the pumped-up rhetoric, Beijing's communist leaders are also wary of opening up to Taiwan's liberal influences, military analysts say.

"The problem is quarantine: political, ideological, psychological, or health," says Chung Chien, a nuclear physicist and military expert at Taiwan's elite Armed Forces University.