TOKYO: Taiwan’s relationship with mainland China has become increasingly ambiguous, with its desire for independence at odds with the drive for greater economic integration, experts on cross-strait relations said at a recent meeting here.

The scale of Taiwanese investment in its giant neighbour has been a staggering $70 billion since 1987.

The flow of people across the straits has also been steady, with one million Chinese from Taiwan settling in, or returning to, the mainland, roughly 400,000 of them in and around Shanghai, experts at a conference organized by Tokyo’s Keio University last month said.

The migration is largely due to the relocation of production bases in China by Taiwan’s semiconductor and personal computer manufacturing contractors, said Leng Tse-Kang, a political economist from Taipei’s National Chengchi University.

“The main reason for the new initiative is to cut costs, enhance international competitiveness and maintain global production networks,” Leng said.

Such companies are largely immune from the risk of a takeover by mainland Chinese interests if cross-strait relations deteriorate seriously due to the involvement by their brand- holding partners — usually Japanese or US firms.

Taiwanese industries must internationalize operations if they want to retain their technological advantage and remain competitive, Leng said, but the government of the island has imposed some limits on investment in the name of national security.

“Many domestic factors constrain policy flexibility and efficiency. Taiwan’s democratic politics and its desire to preserve the democratic system have (become) entangled with business initiatives to explore the booming Chinese market,” he said.

Industry pressure has prompted a call from Taiwanese prime minister Yu Shyi-kun to resume dialogue on the restoration of the “three direct links” with Beijing: transport, trade and postal communications.

The move follows Taipei’s decision to allow Taiwan-based carriers to operate charter flights to the mainland during Lunar New Year holidays, albeit via Hong Kong or Macau — the first since direct links were severed in 1949 at the end of a civil war.

The landmark flights only got off the ground after heated debate and the Taiwanese government rejected an appeal from lawmakers to allow direct flights, invoking security fears.

Samuel S.G. Wu, president of Taipei city development commission and a close aide of Ma Ying-Jeo, the popular mayor from the opposition Kuomintang, believes direct Taipei-Shanghai flights are vital to prevent economic activity gravitating to the Chinese metropolis.

“With the direct link it would take one and a half hours to go from Shanghai to Taipei: it would be possible for executives to do the trip in one day. Most likely they would then choose Taipei as their headquarters,” he said.

Wu said Taiwan should be bold in efforts to increase ties with China because it risks isolation from an international community eagerly courting China.

“Economically the two sides are becoming closer and closer, but militarily and politically the two sides are becoming more and more apart,” he said.

“Taiwan should locate itself in a strategic way in international trade and politics. If foreign investors perceive it as a strategic gateway (to China), then Taiwan will gain respect and money,” he said, noting the island could influence the mainland in culture and politics.

While the process of economic integration may seem unstoppable, a military stand-off still casts its pall.

Current cross-strait relations may seem less strained, but Taiwan President Chen Shui-Bian’s pro-independence stance has led to Beijing freezing dialogue with Taipei.

Lin Cheng-Yi, director of the Institute of European and American Studies at the Academia Sinica of Taiwan, said the island, regarded as a renegade province by Beijing, faces “a real military threat almost every day.”

He recalled that in 1995 and 1996 Chinese missiles were fired near the northern Taiwanese coast.

Lin said the two sides are separated only by a strait 140 kilometres wide, and there is huge disparity in their armies — 2.5 million troops in the People’s Liberation Army facing off against 300,000 Taiwanese soldiers.

China has 400 missiles with a range of between 300 and 600 kilometres, while Taiwan has none. China’s fleet of 60 submarines dwarfs the four owned by Taiwan — two of which were built in the 1940s, he said.

Taiwan should equip itself with more submarines, join the US Theater Missile Defence programme and “retain the capability to retaliate in case of attack” despite having renounced the use of force against China, he said.

The balance of military forces is less uneven if the United States is included in the equation, said Masayuki Tadokoro of Keio University who previously worked at the National Defence Academy of Japan.

President George W. Bush caused a furore in China in 2001 by saying the United States would do whatever it takes to defend Taiwan, a statement seen by many as a departure from the long- term US policy of strategic ambiguity toward the island.—AFP