Taiwan minister backs direct China trade

Taiwan minister backs direct China trade

TAIPEI (Reuters): Taiwan Economics Minister Lin Hsin-i has
recommended lifting a ban on direct trade with rival China after
the sides are admitted to the World Trade Organization (WTO),
media reported on Sunday.

Lin, in a written report to a presidential economic advisory
panel, said Taiwan should allow direct trade with China after WTO
entry expected later this year or early next year.

"Reducing the transportation time of people and goods and
lowering transportation costs will have a positive effect on
trade across the (Taiwan) Strait and help Taiwan become a global
logistics center," the mass circulation China Times newspaper
quoted Lin as saying in the report.

Lin said Taipei needed to push for talks on opening of direct
Taiwan-China transport links and allow more imports from the
mainland.

The United Daily News, another mass circulation Chinese-
language daily, said Lin was also in favor of relaxing the policy
restricting investment in China. It did not elaborate.

The report would be delivered to the 120-member Economic
Development Advisory Committee under President Chen Shui-bian for
discussion, the papers said.

The committee's mission is to make concrete policy proposals
to jumpstart the economy, which slowed to a 26-year low of 1.06
percent year-on-year in the first quarter. A meeting is set for
August 24-26.

The Taiwan government has resisted calls from the business
community to relax a decades-old ban on direct commercial and
transport links with China, citing national security concerns.

Due to the ban on direct contacts with China, trade,
investment and travel must go through a third territory, mostly
Hong Kong."

But despite the ban and simmering political tensions, Taiwan
investors have poured US$60 billion into the mainland since
detente began in the late 1980s, lured by low land and labor
costs, a common culture and language and China's proximity.

Taiwan and China have been bitter political rivals since a
1949 civil war split. Beijing has threatened to attack if Taiwan
declares independence or drags its feet on unification.