China, Taiwan ink trade and crime-fighting deals

Longtime rivals China and Taiwan signed a raft of commercial and crime-fighting deals on Sunday in Nanjing, in the third round of talks in a year.

Progress in cross-strait relations has been remarkably fast. But now, with much of the "low-hanging fruit" in trade and transit deals already picked clean, the question many in Taiwan are asking is: What comes next?

Beijing considers self-ruled Taiwan as part of its territory, and longs to see it return to the fold. So it hopes talks will move on to political issues.

But in Taiwan, President Ma Ying-jeou has ruled out discussing unification. And the pro-independence opposition is becoming increasingly alarmed by how far and fast he has cozied up Beijing.

"Some people think Ma's government has made too many concessions on Taiwan's sovereignty," said Lin Wen-cheng, a cross-strait expert at National Sun Yat-sen University in Taiwan's second-largest city, Kaohsiung, and former adviser to two presidents.

On Sunday, the two sides inked deals on boosting cross-strait flights, joint-crime fighting, and financial cooperation. They also issued a statement on allowing Chinese investment in Taiwan.

The flight deal will normalize cross-strait air links, boosting them from 108 charter flights to 270 scheduled commercial flights per week between 25 cities in China and five in Taiwan. Just a year ago, the two sides only ran special holiday charter flights between a handful of cities.

The financial agreement paves the way for banks and insurers do business on the other side of the Strait. And the crime-fighting deal will help counter cross-strait drug trafficking and money laundering, and make it harder for Taiwanese fugitives to hide out in the mainland.

Such deals appear to have majority support here. A government-commissioned poll showed that 53 percent are happy with the pace of cross-strait opening or even think it's going too slow, compared to 34 percent who believe it's going too fast.

Support for further deals could wane

But several factors could dampen support for further deals. Amid the global downturn, the opening to China has so far failed to give Taiwan's economy the boost that President Ma promised. That's helped dent his popularity – his approval ratings stand at around 33 percent, according to the Taipei-based Global Views Survey Research Center.

Meanwhile, critics say Ma has made a dangerous concession by embracing Beijing's cherished "one China" principle.

One is Parris Chang, a former official in the pro-independence government. In an opinion piece last week for the Wall Street Journal, Mr. Chang warned that Beijing was using time-honored "divide and conquer" tactics to pit Taiwanese against each other.

"The best solution is for Taiwanese politicians – and voters – to understand the game [President Hu Jintao] and Beijing are playing," Chang wrote. "Otherwise, the island may find itself trapped in the cage of 'one China' before anyone realizes exactly how it's reached that point."

Mr. Lin, from Sun Yat-sen University, says he's heard concerns from many Taiwanese that the island's sovereignty is weakening. Some businessmen he spoke with even wondered if Taiwan will hold a presidential election in 2012 or not.

Such talk is likely overblown. Lin and others insist Ma won't enter political talks with Beijing, because that would be akin to political suicide. But Lin also warned that Ma was playing a dangerous game, and needed to work harder to forge domestic consensus on his China policy.

"He should be very careful in dealing with mainland China," said Lin. "China is a very tough negotiator, and they don't need to face opposition from within. They aren't divided, but we are."

Trade pact a lightning rod

The lightning rod now is Ma's proposed trade pact with China, or Economic Cooperation Framework Agreement. The details remain vague, but such a pact would reduce cross-strait tariffs on a broad range of goods such as petrochemicals.

The government just released a poll showing that 60 percent agree that a pact like ECFA could make Taiwanese goods more competitive in the mainland market, among other benefits. But the poll itself immediately drew fire from all sides.

Pundits on a popular pro-independence talk show insisted only 10 percent actually understood what the ECFA was. And even pundits on the popular China-friendly talk show slammed the government for trumpeting a poll that supported its own policies.

In Nanjing Sunday, the two sides were mum on such a deal, saying only they would "continue to exchange views" on the issue. Instead, the agenda for the next round of talks – slated for the fall or end of this year in Taiwan – is decidedly humble: scrapping double taxation on businesses, fisheries cooperation, better inspection and quarantine rules for agricultural products. Peace talks, they aren't.

One test of whether détente can move beyond commercial issues will come in a matter of days, when Beijing decides whether to let Taiwan participate in the annual United Nations World Health Assembly as an observer. The Assembly runs from May 18 to 27.

The two sides have also floated military-to-military talks, and so-called "confidence-building measures." But Taiwan's defense ministry poured cold water on a recent report that the two sides militaries' would meet at a forum in Hawaii, saying the event would not be significant.

All of which shows that despite progress on economic ties, distrust remains high. The government-commissioned poll showed 41 percent of Taiwanese still think China has an "unfriendly" attitude toward the Taiwanese people, compared to 40 percent who think it's "friendly."

Still, Beijing appears happy with progress so far, and holds few illusions about how far talks can go.

"If we were idealists, we would hope to achieve much more, especially in political relations," says Shi Yinhong, of Beijing's Renmin University. "But we're not idealists, we're realists. We're satisfied with the progress so far, and we fully understand Ma Ying-jeou's political considerations – if we push Ma to quickly it could backfire."