IV. Explanations on Some Questions Related to the "Three Direct Links"

1. Consultation on the "Three Direct Links" Question Between Cross-Straits Non-governmental Trade Organizations

The "three direct links" question could have been discussed through the existing cross-Straits consultative mechanisms, namely the ARATS and the SEF. In 1992, the two organizations reached the common understanding that each should express verbally that "both sides of the Taiwan Straits adhere to the one-China principle," thus laying the political foundation for consultation between the ARATS and SEF. However, after coming to power the present leader of the Taiwan authorities categorically negated the "1992 common understanding," thus undermining the foundation for consultation between the two organizations, rendering it impossible yet for them to resume their dialogue and consultation. In these circumstances and considering that non-governmental trade organizations across the Straits have already established smooth communication channels over the years, these organizations have conducted in-depth discussions on technical and professional questions related to the "three direct links," and have reached consensus in many aspects. Therefore, we propose that cross-Straits non-governmental trade organizations conduct consultation on the "three direct links" issue. This is the most practical and feasible pattern of consultation at the present stage.

2. The Flag and Certificate in Cross-Straits Direct Air and Shipping Services

The air and maritime transport circles on both sides of the Straits have reached some understanding through many years of exchange of opinions on how to deal with aircraft and ship flag and certification paper problems in cross-Straits direct air and shipping services. This, plus the successful practices in cross-Straits air and maritime transport, has provided a referential basis for the solutions of these problems.

Air Service

According to relevant provisions in the International Convention on Civil Aviation and its appendixes, an aircraft must have the national or regional identity symbol and registration symbol, both of which must be selected from among the national or regional identity codes of their temporary wireless call signs given to the registering nation or region by the International Telecommunications Union. The aircraft symbols of both the mainland and Taiwan are the same English letter, B, thus the aircraft symbol question will not arise in direct air transport across the Straits. For main-certificate check and approval involved in direct air transport, a Taiwan-based airline company in charge of the operation may present a qualified certification paper for the necessary certificate to the mainland's civil aviation administrative department, and, upon approval, it may file its application. This simple, practical and flexible procedure was applied and verified in handling Taiwan business people's charter plane business at the 2003 Spring Festival, providing useful experience for resolving problems to be involved in the two-way direct air transport across the Straits.

Shipping Service

The ships' flag and certification problems in cross-Straits direct shipping service can be resolved with reference to the relevant procedure adopted for the navigation lines for shipping service between Hong Kong and Taiwan after Hong Kong's return to the motherland in 1997, as well as for the shipping service between Fujian's coastal areas and Jinmen and Mazu. That is to say that a ship of either side navigating directly across the Straits will need only to fly the company's flag or a flag with symbols agreed upon by the two sides, and, when entering a port of the other side, it will not need to fly the flag of the other side; and that one side should check the relevant certification papers of the other side and, if necessary, may write its comments on a separate paper.

3. Participation of Foreign Companies in Cross-Straits Air and Shipping Services

The air and shipping services across the Straits are by no means "state to state air and shipping services," nor are Cross-Straits air and shipping international lines, therefore they should be operated by mainland and Taiwan airlines and shipping companies or by mainland-Taiwan joint ventures. Sino-foreign joint airlines and shipping companies registered with the authorities on either side may participate in such business operations, but the foreign partners of such companies are not allowed to have the dominant share. These propositions of ours are conducive not only to safeguarding the principle of preventing China's sovereignty over aviation and navigation from being infringed upon, but also to protecting the legitimate rights and interests of the Chinese people on both sides of the Straits.

4. The "Three Direct Links" and the So-called Taiwan Security

The Taiwan authorities assert that the "three direct links," especially the direct, two-way air and shipping services across the Straits will seriously jeopardize the security of Taiwan, and take this assertion as their main reason for impeding the direct, two-way and complete "three links." Certain Taiwan organizations recently classified its security issue into the four issues of military security, political security (mainly, Taiwan's being dwarfed politically), economic security (mainly, Taiwan's markedly increasing economic dependence on the mainland market, its industrial "hollowing" and its growing unemployment rate), and social security (mainly, public order, epidemic prevention, social welfare and education burden). Apart from those possible problems relating to social security that can be discussed and pre-arranged in the "three direct links" consultations, the other viewpoints are ungrounded in facts; rather they are products of the Taiwan authorities' inveterate hostility toward the mainland, their purpose being to influence Taiwan compatriots' attitude toward the "three direct links" and continue to postpone and obstruct the "three direct links." These viewpoints need to be pointed out and corrected.

The Assertion That "Direct Air and Shipping Services Will Seriously Jeopardize Taiwan's Military Security."

First, the mainland's policy on Taiwan is based on the fact that the people on both sides of the Straits are bound together like brothers and sisters, and, as the saying goes, "Blood is thicker than water." We cherish greater hope than any others for solving the Taiwan question by peaceful means. The mainland has worked for the prospect of peaceful reunification with the greatest sincerity and the utmost effort. When we say we will not commit ourselves to rule out the use of force, it is directed not against the Taiwan people, but against the attempt of foreign forces to interfere with China's reunification and the attempt of Taiwan's separatist forces to materialize "Taiwan independence." Second, the technical and professional problems concerning direct air and shipping services across the Straits, consultation on an equal footing by the two sides should be conducted and unanimity of opinions reached, before they can be put into practice. By then, Taiwan's concern about its security will be properly resolved. Third, in fact, direct transport service across the Straits has been opened on a trial basis for six years, and direct sea transport between coastal areas in Fujian and Jinmen and Mazu has been going ahead for over two years. These have never infringed on Taiwan's "military security," nor have they brought any "threat" to Taiwan. On the contrary, these direct contacts have helped build up a harmonious and stable atmosphere in the Taiwan Straits area. Fourth, the fundamental way of realizing and maintaining peace and stability in the Taiwan Straits area is that the Taiwan authorities must totally abandon the separatist claim to "Taiwan independence" and stop all the splittist activities along that line; and that negotiations should be held and an agreement reached on "an official end to the state of hostility between the two sides under the principle of one China so as to jointly safeguard China's sovereignty and territorial integrity and work out plans for the development of the future inter-Straits relations. The more this state of hostility is eased, the more peaceful the Taiwan Straits area will become. And the more rapidly the inter-Straits relations are developed, the better the compatriots on both sides of the Straits will be assured of their security.

The Assertion That "Taiwan Will Be Dwarfed Politically" in the Process of the Consultation on the "Three Direct Links."

We have always maintained that both sides should solve their differences and problems in the spirit of mutual respect and consultation on an equal footing and with a practical approach, and that one side should not impose its will on the other. Previous negotiations between the ARATS and SEF and exchanges and consultations between nongovernmental trade organizations on both sides of the Straits were all carried out on an equal basis. The question of who would be "dwarfed" simply did not arise. In the trial direct transport across the Straits and the direct sea transport between coastal areas in Fujian on the one hand and Jinmen and Mazu on the other, the two sides handled transportation facilities and technical problems entirely on the principle of equality and reciprocity, bringing about mutual benefits and a win-win situation. Future negotiations on the "three direct links," including market opening and relevant management, and arrangement of operation rights and interests will also be carried out under the principle of mutual respect, consultation on an equal footing, fairness and justifiableness, reciprocity and mutual benefit. The question of Taiwan being "dwarfed" in the "three direct links" process will not arise at all.

The Assertion That "the 'Three Direct Links' Will Threaten Taiwan's Economic Security."

First, about the security problem stemming from Taiwan's increasing economic dependence on the mainland market, as a result of the "three direct links." The fact is that the mainland and Taiwan each has its economic advantages, which may supplement each other's needs. In the process of inter-Straits economic exchange and cooperation, the Taiwan economy has gained impetus for growth from the rapidly economic growth of the mainland, which has provided favorable conditions for Taiwan's industrial restructuring and given its enterprises new room for development, thus stimulating its economic development. This has been fully proved by the facts of the past two decades. In the upsurge of economic globalization and regional economic cooperation, if and when the "three direct links" is realized, and each side's merits are well developed and the two sides are linked closely together economically, this will facilitate both sides in their efforts to prevent economic and financial risks and achieve common prosperity. This conclusion can be readily drawn if one views the question in the light of the interests of the Taiwan compatriots and the needs of Taiwan's economic development.

Second, about the "three direct links" accelerating Taiwan's industrial shift to the mainland, thereby resulting in the "hollowing out" of Taiwan's industry. Industrial "hollowing out" generally refers to the decline of the proportion of manufacturing industry in the total economy, as well as the decline of its productivity and international competitiveness. The research results from relevant departments in Taiwan show that the investment of Taiwan enterprises on the mainland increased rapidly from 1990 to 2001. During this period, the export share of Taiwan products in the global market did not decrease, but instead it increased from 1.96 percent to 2 percent. It did not cause a drop of the total productivity and competitiveness of Taiwan's manufacturing industry, or the so-called "hollowing out" of Taiwan's industry. On the contrary, the "three direct links" will help Taiwan enterprises to rationally allocate and use their essential production factors and resources. Through division of labor and cooperation, Taiwan can bring into play its economic advantages, increase its development potentials and competitiveness, and effectively avoid the industrial "hollowing."

Third, about Taiwan enterprises' investment on the mainland resulting in increased unemployment in Taiwan. The fact that the rate of unemployment in Taiwan has increased in the past few years has been caused mainly by a decline of the enterprises' will in investment. In fact, one of the main reasons is that the current leader of the Taiwan authorities sticks to the separatist stance of "Taiwan independence," undermines the cross-Straits relations and impedes the "three direct links," which have dealt a blow to the confidence of Taiwan and overseas investors. At the same time, the rising unemployment rate is also due to its structural unemployment. With the increase of investment and production costs in Taiwan, labor-intensive industries there have further lost their competitive advantages, and investors have had to look elsewhere for low-cost areas for continued development. By investing on the mainland, such enterprises can regain their competitiveness, and use the profits they make on the mainland to increase their investment capacity in Taiwan, so as to support the sustained development of the emergent industries in Taiwan, and greatly increase their exports to the mainland. All these have played an important role in increasing Taiwan's employment, upgrading its industries and stabilizing its economy.