China port woos Taiwan as pace of trade quickens

August 19, 1991|By Robert Benjamin | Robert Benjamin,Beijing Bureau of The Sun

XIAMEN, China -- Like a suitor wooing a long-lost mate, this port city in southeastern China primps itself for the object of its desire: the decidedly wealthier island of Taiwan, only 100 miles away by water but separated from Xiamen by more than four decades of political hostility.

Construction workers here move in double-time compared with much of the rest of mainland China, expanding Xiamen's roads, ports, airport and industrial facilities. A 20th century town is beginning to bloom over the skeleton of the city's colonial past.

Gleaming private villas sprout from hillsides. Expensive sing-along bars dot street corners. Peddlers accept Taiwanese currency. Young girls -- the locals call them "chickens" -- gather in the city's coffee bars in the afternoon looking for lucrative liaisons with Taiwanese men.

And Xiamen's taxi drivers honk, honk, honk their car horns in a way drivers do nowhere else in China, as if to say "Hurry up, time is money, and more Taiwanese money means there may be a big wedding here some day, a historic reunion of Communist China and its Nationalist enemies across the water."

For decades after the Nationalists fled to Taiwan to re-establish their capitalist Republic of China in 1949, both sides hurled shells at each other from nearby islands in the Taiwan Strait. The last shots were fired in 1984. Now the salvos are financial.

"Investment follows the potential for profit -- that's not communism or capitalism, just a fact," proclaimed a Xiamen deputy mayor, Zhang Zongxu, cryptically summarizing the first part of the strategy by which the mainland hopes to retake Taiwan.

Chen Kongli of Xiamen University's Taiwan Research Institute provided the final part of that long-term logic: "Taiwan is a commercial society. Its policies are determined by the opinions of its businessmen. If Taiwan is financially integrated with the mainland, then political integration may follow."

But political reunification, the long-stated official goal of authorities on both sides of the strait, remains as much as TC generation away.

But, in the meantime, Xiamen's proximity to the island, its favorable tax and investment policies for foreigners, its cheap labor and the fact that its Chinese dialect and customs are similar to those on Taiwan already have succeeded in luring thousands of Taiwanese here and a flow of capital that is markedly heating up the complex political mating dance between Beijing and Taipei.

Taiwanese first were allowed by their government to visit the mainland in 1987. Since then, more than 3 million visitors from the island of 20 million residents have traveled to China, particularly to Xiamen and surrounding Fujian province, where as many as a third of all residents have family ties to the island.

Officially condoned indirect trade with the mainland -- flowing chiefly through Hong Kong -- has spawned more than 350 Taiwanese-backed ventures in the Xiamen area alone, representing an estimated investment of $400 million.

Total trade between the mainland and Taiwan, reported as $70 million in 1979, topped $4 billion last year and could reach $5 billion this year, making the island more and more economically reliant on China. Smuggling and illegal but widely acknowledged direct trade using forged shipping documents add to the cross-strait commercial links.

Taiwanese businessmen's "mainland fever" has cooled in the past year, partly because island authorities are regulating mainland investments more strictly and partly because prospects have dimmed that Taiwan's largest company, the Formosa Plastics Group, will build a proposed $7 billion petrochemical plant in Xiamen.

And the verbal sniping between mainland and Taiwan authorities has far from abated. China still threatens to take back Taiwan by force, and Taiwan demands that the mainland drop its communist ways. The island still forges independent diplomatic, trade and arms links, and Beijing labels these unacceptable efforts to create "two Chinas."

This spring, however, Taiwan formally ended its more than 40 years of civil war with the mainland. It has all but thrown out its longtime policy of "three nos" -- no official contact, communication or negotiations -- with the mainland. And when record floods inundated eastern China last month, the island donated several million dollars to the mainland, the Nationalists' first direct aid to the Communists since World War II.

Every two steps closer in the courtship, though, seem to be followed by one step apart. Last Monday, for example, Taiwan revoked permission for China's Red Cross to send the first official mainland delegation to the island. But two Chinese reporters with the Red Cross group were allowed to enter Taiwan, a first for mainland journalists.

Despite the continued wrangling, the mainland and Taiwan are gearing up for the expected next step: the onset of legal direct transportation and trade. Xiamen officials think that is no more than two years away, and they break into broad smiles at the prospect of the Taiwan-funded boom that would ensue.

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