Chinese Sphere: Direct Connect Across the Strait
On December 15, Taiwan and China officially launched direct airline, shipping, and postal links between each side. Ever since 1949 when the Communists evicted the Nationalists from China, forcing them to set up a government-in-exile in Taiwan, the Taiwan Strait maintained a distinct bumpiness in a world that was going flat. Up until last Monday, all air and shipping activity between the two sides had to be routed through Hong Kong and Macau (air) or Okinawa (sea). The cutting out of the middleman, so to speak, will significantly reduce costs and travel times as a quick look at a map of the region would show.
The Southern Metropolis Daily, a commercial newspaper based in southern China, sees this as a positive development and looks forward to seeing the three links shorten not only the travel distance between the two sides of the Strait, but also the relational: “A change in the nature of economic activity will ultimately lead to a change in people’s hearts. Through closer interaction, there will be mutual understanding of each other’s thinking, a sharing of each other’s markets, and a sharing of common responsibilities. … Although differences still exist over politics, enhanced people-to-people contact can gradually temper the residual effects of ideology.”
In Taiwan, there is a guarded optimism. The Taiwan-based China Times writes, “Whether you are a cabinet official or industry titan, this is the time to think of the best way to make use of this rare historical opportunity and retool industrial competitive strategy. For example, government policymakers should think about how to take advantage of the mainland’s efforts to expand domestic consumption, how to attract Taiwanese businessmen to set up their operating headquarters in Taiwan, and how to develop Taiwan into an operational and logistics center. Now that the three links have been opened, strategies for addressing these issues should be developed without delay.”
Hong Kong stands to lose a significant amount of business from this further integration of China and Taiwan’s economies. Sing Tao, one of Hong Kong’s leading dailies, writes, “Hong Kong has already made plans early on for the opening of direct flights. Affected businesses have also prepared themselves to face this situation. However, the arrival of the financial crisis this year has made Hong Kong’s economic outlook even grimmer. During November, the peak pre-Christmas period for shipping companies, Chinese exports fell from their levels one year ago, the first drop in seven years. In addition to that, Hong Kong’s airport cargo shipping fell 18.7%. Passenger traffic fell 5.56%, the fourth consecutive declining month. Now that Taiwanese businessmen do not need to travel through Hong Kong with the three links in effect, the statistics for Hong Kong may get even worse.”
