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Cross-Strait flights: Move over,
Lindbergh
By Michael Taylor
TAIPEI - Technically, it will not go down as
among the greatest flight achievements in aviation
history. However, the China Airlines (CAL) 747-400 that
flew 243 Taiwanese businessmen and their families from
Shanghai home to Taipei on Sunday bridged a political
gap far wider than the 687 kilometers separating the two
cities. It was the first time in more than five decades
that Taiwanese civilian aircraft have been permitted to
operate in Chinese airspace, and hopes are high that it
heralds an acceptance among government authorities on
both sides that greater China-Taiwan economic
integration will be to their mutual benefit.
However, such hopes are perhaps premature, and
several interesting questions must be pondered. Perhaps
foremost is the fact that this breakthrough in
cross-Strait relations - and breakthrough it definitely
is - will likely be very limited in terms of its
immediate practical effects. Moreover, it would be
incorrect to assume that the stage is now set for the
establishment of san tong (three links), or
legalized direct trade, transport and communications
links across the Taiwan Strait. That would require
negotiation and compromise, and Beijing and Taipei have
long been in disagreement on the nature of such talks.
Although the links would be economic in nature, the two
sides are hung up on a very political issue: Taiwan's
sovereignty. Beijing insists on its "one China"
formulation as a principle for negotiations on opening
economic links; Taipei argues that anything, including
"one China", can be discussed, but there should be no
preconditions for the talks.
The result: a
longtime logjam on the issue of three links. Enter the
ruling Democratic Progressive Party's resident
lumberjack, legislator Chen Chung-shin, who has been
conducting unofficial "party to party" negotiations
between Beijing and the DPP, as opposed to the DPP-led
government administration. Last year, President Chen
Shui-bian took over as chairman of the DPP, in part to
consolidate his power domestically but also, say some
observers, to help foster a mechanism for his
administration to communicate with Beijing through
unofficial party-level talks. As part of that
restructuring, President Chen tapped Chen Chung-shin to
become chief of the party's Chinese Affairs Committee.
Chen Chung-shin is widely believed to be a favorite of
authorities in Beijing, who have made no secret of their
dislike for Taiwan's president. Observers here note that
the DPP lawmaker's frequent travel in China, which is
characterized to the press as "entirely private", is a
sign that Beijing has accepted his emissary role.
However, based on the president's own comments,
the establishment of direct links is still a long way
off. Chen Shui-bian must placate pro-Taiwan elements
among his supporters, including the Taiwan Solidarity
Union (TSU) headed by former president Lee Teng-hui, the
creator of the "go slow, be patient" policy toward
economic integration with China. That policy, much
reviled as it was by many Taiwanese business leaders,
was replaced last year the current administration with
one of "active opening, effective management". But
nomenclature aside, Chen must still answer to the TSU
and many members of the DPP itself, who favor Taiwan
independence from China and thus oppose economic
integration on political grounds.
In truth,
"three links" really boils down to one: direct air
links, for cargo but, more important, for passengers.
Direct communications are a fait accompli due to
undersea fiber-optic cable systems, at least two of
which cross beneath the Taiwan Strait (both are
conveniently majority-owned by third-country entities).
Other communications networks are simply part of an
international grid, such as the one operated by Asia
Global Crossing, which connects the two sides anyway.
Meanwhile, goods are shipped "indirectly" through Hong
Kong or by detouring vessels through the southern Ryuku
Islands to obtain formalistic stamps and paperwork - a
silly process but one that no doubt delights Japanese
customs officials. Yet direct air links, which
potentially will have the greatest impact on Taiwan,
remain elusive even after Sunday's historic event.
The CAL flight is the first of six charter
flights to be operated by each of Taiwan's international
and domestic airlines, in what the administration
characterizes as a special service for the hundreds of
thousands of Taiwanese doing business and residing in
the Shanghai region. The flights are indeed special: the
jumbo jets are not allowed to fly directly across the
Taiwan Strait, but rather must stop over in Hong Kong or
Macau - thus transforming what should be a 90-minute
flight into a four-hour journey. But the charters are
nevertheless more convenient for the executives than the
normal requirement that they transfer planes in the
special administrative regions, which sometimes takes
two to three hours. (In normal times, Hong Kong's
Dragonair cleverly avoids this hassle by discreetly
changing its flight numbers on the tarmac in Hong Kong,
thus eliminating the need for passengers to change
planes, which it can do because Dragonair planes are
neither mainland Chinese nor Taiwanese.)
Largely
lost amid the excitement and sense of historical
breakthrough surrounding the Chinese New Year indirect
Taipei-Shanghai charter flights is the fact that their
financial impact on the airlines' margins will be just
about nil, or even slightly negative. The six charters
are not allowed to go beyond their mandate of bringing
Taiwanese residents of the Shanghai region home for the
Chinese New Year holidays and returning them to their
place of business afterwards. The CAL 747 that landed
triumphantly on Sunday at Taiwan's Chiang Kai Shek
International Airport with a full load of beaming
Taiwanese investors had flown to Shanghai's Pudong
International Airport early that morning with no paying
passengers at all, and carrying just a handful of bored
flight attendants and some officials from the
administration. And when the plane returns its
post-holiday passengers back to Shanghai in another 10
days or so, it will likewise make the return flight
without any customers. The same is true for the other
five companies that will operate flights.
Deadhead flights, long detours and meaningless
stopovers - this is not exactly the most
cost-competitive way to run an airline. However, based
on the share-price performance of CAL and EVA Airways,
the only carriers listed on Taiwan's frenetic stock
market, investors are keen to get in on the action. CAL,
which touched NT$10 in late October, was trading at
about NT$17 (about 49 US cents) last Friday, while EVA
has climbed to about NT$16 from about NT$11 in the same
period. One might argue that these huge gains in the
companies' valuations would be justified if daily direct
Taipei-Shanghai flights had been established, since it
would herald a boost in passenger revenues and perhaps
mean that Taiwanese airlines could fly over China and
thus greatly expand their European services. But even
that would be a tough argument, given the global
environment for the airline business and the fact that
China's airlines would certainly be competing with their
Taiwanese counterparts. What has occasioned the rise in
stock prices is something far less earth-shaking: a
single, probably loss-making charter flight for homesick
holidaymakers.
While there is no denying that
Taiwanese air carriers operating in China is a major
development, its significance is in its historical
importance, not economic, and it should be viewed in
that context. Chen Chung-shin, the DPP's point man for
unofficial cross-Strait negotiations, still has his work
cut out for him, and the establishment of direct air
links is not likely to occur in the near future.
(©2003 Asia Times Online Co, Ltd. All rights
reserved. Please contact content@atimes.com
for information on our sales and syndication policies.)
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