US business group asks Taiwan, China to foster bilateral trade

May 27, 2008, 10:40 GMT

Taipei - A major US business group Tuesday urged Taiwan and to open their markets and improve their relations after the election of a China-friendly government on the island.

'We called on Beijing to appreciate the special opportunity created by the current political environment in Taiwan, and therefore to respond positively to the Ma administration's initiatives,' the American Chamber of Commerce in Taipei said in a statement.

It also asked the new Taiwan government to take action on measures that it could implement unilaterally, such as removing caps on direct Taiwanese investment in China and on mutual fund investments with China holdings.

The chamber made the appeal through the release of its 84-page annual White Paper, which reflects the US businessmen' views of challenges, problems and pitfalls Taiwan faces economically and politically.

The chamber noted that the return to power of the China-friendly Nationalist Party or Kuomintang (KMT) with Ma Ying-jeou's victory in the March presidential election 'should end the painful policy gridlock that Taiwan was often subjected to in recent years.'

The election ended eight years of rule by the pro-independence Democratic Progressive Party (DPP), which restricted trade and was blamed for souring cross-strait relations and escalating tensions.

Taiwan and China split at the end of a civil war in 1949, but Beijing still regards Taiwan as a part of China that must be brought back to the Chinese fold, if necessary by force. It refused to deal with the DPP government over its pro-independence stance, prompting the DPP government to bar official contacts with China.

Chamber Chairwoman Tung Tai-chin said it would be impractical for Taiwan to continue to reject the mainland, given that 'China has become so central to the global supply chain and that failure to engage with the Chinese economy means weakening your ties with the world and regional economies.'

'We urge the current government to move forward as quickly as possible with its plans to expand non-stop charter flights across the strait, starting with the weekend service,' she said.

Tung said only when air travel between Taiwan and China becomes more convenient will multinational firms choose to locate more of their business units and key personnel on the island.

Taiwan's new government headed by President Ma who has vowed to engage China to mend ties has planned to launch weekend charter flights along with Taiwan travel by Chinese tourists from July 4.

Wu Poh-hsiung, chairman of the ruling KMT, is currently visiting China and expects to meet Chinese President Hu Jintao in Beijing on Wednesday, to express Ma's wishes to improve ties and launch the services to mark the start of a normalized cross-strait economy.