Taiwanese Leader Focuses on Economy
In Interview, President Ma Touts Ties to Mainland, Highlighting Increased Cooperation

By Maureen Fan
Washington Post Foreign Service
Wednesday, December 10, 2008

TAIPEI, Taiwan, Dec. 9 -- With GDP shrinking and unemployment spiking, Taiwanese President Ma Ying-jeou said Tuesday that his focus was squarely on the self-ruled democratic island's domestic economy. For Ma, that agenda clearly includes promoting the economic benefits of closer links to China.

Not quite seven months into a job he won after voters repudiated what they called the divisive tactics of his predecessor, Chen Shui-bian, who regularly provoked Beijing with a pro-independence agenda, Ma bragged a little about this month's expansion of daily direct charter flights to 26 cities in China.

"Before we are in office, the trip from Shanghai to Taipei, for instance, will take five to six hours, with a stopover in Hong Kong," Ma said in an interview in the Presidential Building in Taipei, adding that he had felt no political pressure to move more slowly in forging closer ties with Beijing.

In July, weekend flights cut that travel time to 2 1/2 hours. From next week, Ma said, "travel time will be one hour and 22 minutes."

"I don't think people will dislike that," he said.

After the acrimony between Beijing and Taipei that marked Chen's eight years in office, the comparatively pro-China stance of Ma's Nationalist Party nevertheless represents a test for Beijing, which insists that Taiwan must be reunited with the mainland, by force if necessary.

Mainland China and Taiwan have been governed separately since 1949, when Nationalist forces fled the communist takeover. There have been no regular direct links across the Taiwan Strait for decades; talks to restart them failed in 1999.

But four agreements signed by the two sides last month promoting direct air, sea and postal links and signaling greater cooperation on food safety issues have garnered overwhelming support here, according to polls, Ma said. Next up will be more cooperation between mainland and Taiwanese banks, allowing them to invest in each other.

For its part, Ma said, China has made compromises that allowed his administration to save face, from quietly permitting official state media to use Taiwan's preferred name during the Beijing Olympic Games this summer to letting Taiwan send a former vice president to the Asia Pacific Economic Cooperation leaders' summit in Peru last month.

"When you see all these people taking pictures together, this was something we haven't seen for maybe two or three decades, and that certainly gives people in Taiwan a sense of dignity," Ma said of the summit, adding that he hopes China will also allow Taiwan to participate in a meeting next May of the World Health Assembly, an agency of the World Health Organization.

"We're not asking to be admitted to the WHO in the name of Taiwan. . . . What we're doing is calling upon the United Nations to examine the need for the 23 million people's meaningful participation in the activities of the U.N. specialized agencies," Ma said. "Our demands are rather moderate, and what we have been saying is this is not only a political issue, it's also a human rights issue."

The direct links, which do not take full effect until next year but are expected to result in billions of dollars in savings, couldn't come any sooner, experts said. Taiwan's economy shrank by 1.02 percent in the third quarter of this year, the first contraction in five years. Previously, the economy had enjoyed annual growth in the 4 to 5 percent range.

Taiwan is China's seventh-largest trading partner, with $105 billion in trading volume between January and September this year, or 5.3 percent of the mainland's foreign trade. But China is now Taiwan's largest trading partner, with 40 percent of the island's exports going to the mainland, representing more than $84 billion in goods.

Efforts to boost the economy here are not all focused on China, however. Although Taiwanese investment in China is not easily tracked, mainland investments recorded in Taipei have dropped 3 percent over the past six months, according to Ma. "The idea is not to encourage investment over there but instead to make Taiwan's own investment climate better," he said.

As a result, Taiwan has launched an infrastructure construction program and plans to distribute $110 vouchers to every citizen next month to increase domestic spending. In early October, Taiwan's government was also the first in Asia to guarantee bank deposits, regardless of limits. There have been no bankruptcies.

Ma said he hoped to create 120,000 jobs between now and next October and an additional 220,000 jobs from then until 2012, the end of his term. "But it's very difficult to change the economic reality when we are so much affected by your financial tsunami," he said, referring to the U.S.-led global crisis.

"Hopefully we will see some signs of revitalization in the later part of next year," Ma added later. "But that requires a lot of efforts and also a lot of luck."