Direct Flight Talks Resume

Economic News

22 Jul 2010
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Chen Ming-tong, the chairman of the Mainland Affairs Council (MAC), the decision-making body on cross-Strait policy, said on June 21 that Taiwan and China would resume talks over lifting the ban on direct charter and cargo flights across the Taiwan Strait and the ban on tour groups going to Taiwan directly from China.

The two sides have entered the seventh round of negotiations over the direct charter flight issue and the fifth round of negotiations on mainland Chinese tourist issue. Talks have been suspended for two months and Chen is urging both sides to resume dialogue. He said to the local press that he had received a positive response from the mainland authorities and that he expected talks to restart soon although no timetable has been set.

Taiwan has banned direct air and shipping links with the mainland since the Nationalists lost the Chinese civil war in 1949 and fled to the island. Because of the ban on direct transportation links between Taiwan and the mainland, both cargo and passengers have to travel via a third location, usually Hong Kong or Macao, adding four hours to what should be an hour-long flight.

The first non-stop charter flights across the Taiwan Strait were launched during the Chinese Lunar New Year in 2005. In June 2006, the mainland and Taiwan agreed to open charter flights for other traditional festivals, including Tomb-sweeping Festival, the Dragon Boat Festival and the Mid-autumn Festival. The first cross-Strait charter flights for Mid-autumn Festival and Tomb-sweeping Festival occurred in October 2006 and April 2007 respectively.

For the first time, on June 12, The Chinese mainland and Taiwan launched cross-Strait charter flights for the Dragon Boat Festival. Five mainland airline companies including Air China and six Taiwan companies including China Airlines undertook 21 round-trip flights from June 15 to June 22, according to the General Administration of Civil Aviation of China.

Both people in the airline industry and ordinary citizens across the Strait believe charter flights at festival times were not enough and expressed their hope that charter flights would soon become regular.

It is estimated that over 1m Taiwanese people live on the mainland - most of them businessmen and their families. Many analysts believe that direct flights between Taiwanese and Chinese cities would significantly boost Taiwan's economy as it would allow more people to be based in Taiwan while working in China and encourage more international companies to establish their Asian headquarters in Taiwan. However, on the other hand, Taiwan authorities are concerned that direct flights could also have a negative impact on the economy as they could encourage more people to move to China.

In December 2006, the Council for Economic Planning and Development estimated that easing restriction for Chinese tourists could add 0.15 of a percentage point to economic growth.

According to reports, it appears that both the direct charter flight issue and the mainland Chinese tourist issue will be negotiated in one package deal. According to the tacit agreement between the two sides, both sides should sign a document as soon as they reach an agreement on entry of mainland Chinese tourists into Taiwan. But they do not need to sign in the case of direct charter flights and will put off the signature until the day they reach agreements on the so-called three direct links (direct links of trade, mail service and transportation) between the two sides.

Chen noted that the negotiations on mainland tourist issue had progressed faster and overcome some technical problems. However, when the negotiation was approaching the final stage in May the mainland authorities requested introduction of a political frame into the document.

Chen told the press the ban on Chinese tourists could be lifted as long as Beijing put aside political consideration.

"The two sides have achieved major breakthroughs in bilateral technical talks concerning these issues. The Chinese side should speed up its pace in resolving the remaining details and wrap up the talks as soon as possible," said Chen.

In an interview with an international news organisation, Chen also explained one of the major sticking points. He said that Beijing was insisting on calling Taiwan "China, Taiwan" in every agreement, which Taiwan has dismissed as propaganda for Beijing's One-China Policy.

Analysts believe that Beijing is closely watching Taiwan's political climate in the run up to the March 2008 presidential elections. The opposition party, the Komintang (KMT), is outwardly enthusiastic to improve economic links with the mainland, while the pro-independence ruling Democratic Progressive Party (DPP) is more cautious. The election is expected to be closely fought the KMT presidential candidate Ma Ying-Jeou and President Chen Shui-bian but it is unclear what this would mean for any future agreement over the flight and tourism issues, which are highly sensitive for both parties.

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