The first formal meeting between top-ranking Chinese and Taiwanese representatives since the two separated in 1949, held last month in Nanjing, provided another reassuring sign that Taiwan's risk factor as a conflict flashpoint is no longer as acute as before, and as it continues to drop, chances of another Hong Kong developing off the mainland are getting brighter.
Yes, there's still a military build-up on the Chinese side and Chinese ballistic missiles - some 2,000 of them - are still aimed at Taiwan, while the Taiwanese aren't letting up on their defences either. But these haven't been used for years and it's becoming increasingly apparent that there won't be any need to use them in the future. Contacts across the Taiwan Strait have been getting closer and closer as, unlike before, exchanges of mutual threats are becoming rarer and rarer.
Rather, at the Nanjing meeting, the leaders of Taiwan's Mainland Affairs Council and China's Taiwan Affairs Office discussed the opening of mutual representative offices, greater economic co-operation, and health care for Taiwanese students studying in mainland institutions. Beijing still considers Taiwan a renegade province of China, and the Taiwanese are quite zealous about maintaining their separate identity. But reunification, either as a desire or a fear, wasn't in anybody's mind in Nanjing. Ever since President Ma Ying-jeou came to power in 2008, advocating closer ties with the mainland, the equation began to change, and now that Xi Jinping is on the saddle in Beijing, the "One China, Two Systems" policy that forms the mainland line on Hong Kong and Macau seems to have found yet another suitable candidate. Confrontation isn't in anybody's mind right now.
With an increasing number of mainlanders visiting the island and loving the experience of its sights and sounds and people, and exploring the opportunities of what for many of them is an uncharted territory, there's no reason it should be. And having received almost three million mainland tourists in groups last year, the Taiwanese are now ready to accept more individual visitors as well. They come, they spend, driving up businesses and stirring up the economy, as new hotels keep coming up in Taipei and other places of visitor interest and foreign luxury brands open stores as glitzy as one would find in Hong Kong. Burberry, the UK group, opened a Taipei store in April 2012, amid much fanfare, which is now its largest shop in Asia. What started out in 1987 as a humanitarian move to allow separated islanders to visit relatives left behind on the mainland is now a flourishing economic programme.
Travel between Taiwan and the mainland is no longer via Hong Kong, and as direct transport, postal, and service links have grown, so has business between the two. Eighty-five ports are now open to mutual ships and trade has been growing at over 10 per cent annually. Mainland banks have branches in Taiwan and mainland investors can now buy into Taiwanese companies, though to a limited extent. Between 2009 and last October, the Chinese approved 12,135 Taiwanese investments on the mainland, with actual commitments of $11.1 billion.
By contrast, mainland investments on the island have been rather modest so far, some $1 billion, and are confined to only selected areas such as technology and real estate. But they're growing and it's not for nothing that the big Chinese property company, Vantone Holdings, has entered into a partnership with a Taiwanese group to build luxury flats on a mountain north of Taipei. The project, nicknamed Vantone Taipei 2011, is aimed principally at rich mainland Chinese, as well as global Chinese elites, who have been one of the big forces behind thriving property markets in Hong Kong, Singapore, Australia, and elsewhere.
It's not easy and simple yet for mainland Chinese to buy property in Taiwan. But Beijing's growing willingness to let Taiwan be is also having another positive effect. It's attracting developers from elsewhere, especially Hong Kong, and even reputable businessmen like Li Ka-shing have publicly expressed their optimism about Taiwan's housing market. Foreigners buying property in Taiwan are exempt from the 15 per cent stamp duty they've to pay in Hong Kong and can also apply for freehold ownership, paying only one per cent transaction cost of the value.
And who knows there may even be a tunnel or a bridge linking the mainland and Taiwan some time in the future, not with conquest in mind but to let the two economies come even closer together. There aren't many takers for the idea yet among the Taiwanese, but it's been on the Chinese mind for decades and is part of Beijing's 20-year communication plan announced in 2005. If built between Fujian province's Pingtan Island, to which there's already a bridge connection, and Taiwan's northwest county of Hsinchu, the distance would be 124 km, about three times the length of the Channel Tunnel connecting England and France.
rbarun@gmail.com
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