A major outcome of implementing the "1992 consensus" by both sides of the Taiwan Straits, the Wang-Koo Talks symbolized a "historically important step forward” in cross-Straits relations. Over the past decade, although the two sides are alienated politically, the Wang-Koo Talks have produced far-reaching influence on the routine talks, economic and trade cooperation, and exchanges in other fields across the Taiwan Straits.

I. The Wang-Koo Talks have institutionalized routine consultation and political dialogue mechanisms across the Straits, and solved some practical problems in the exchanges between the two sides

The Wang-Koo Talks were the first top-level non-governmental talks across the Taiwan Straits since the founding of the People's Republic of China in 1949. It yielded four agreements—the Joint Agreement of the Wang-Koo Talks, the Agreement on the Mechanisms of ARATS-SEF Contacts and Talks, the Agreement on the Use and Verification of Notary Certificates Across the Straits, and the Agreement on Inquiry of/and Compensation for Registered Mail Across the Straits.

These agreements have played an important role in cross-Straits relations. First, the two sides have institutionalized the consultation mechanism based on the one-China principle, which is conducive to the steady development of cross-Straits relations. Second, the agreements have created a favorable environment and atmosphere for economic, trade, cultural and personnel exchanges across the Straits.

Following the Wang-Koo Talks, ARATS and SEF conducted nearly 20 consultations and talks at different levels, discussing issues derived from cross-Straits exchanges. Because the Taiwan authorities made a big issue of "judicial jurisdiction," ARATS-SEF talks suffered one after another setback. On the three routine topics of the "repatriation of hijackers from either side of the Taiwan Straits," the repatriation of stowaways and cross-Straits fishing disputes, either no agreement could be reached, or the Taiwan authorities refused to sign the agreement reached by ARATS and SEF. Nevertheless, it should be noticed that the smooth channels of ARATS and SEF and their undertaking of routine consultations, as well as the decision in the spring of 1995 to hold the second Wang-Koo Talks, pushed forward the cross-Straits relations. Regretfully, both the consultation and the schedule for the second Wang-Koo Talks halted due to the deteriorated atmosphere as a result of Lee Teng-hui's US visit in June 1995. The cross-Straits political situation regressed dramatically and intense confrontation appeared.

The 15th National Congress of the Communist Party of China (CPC) raised again the proposal of launching political negotiations across the Straits at an early date, and a series of positive and flexible measures were taken successively. Due to the pressures in and outside Taiwan Island for promoting negotiations, as well as a need for an election, the Taiwan authorities had to adopt some practical measures. In October 1998, SEF Chairman Koo Chen-Fu led a delegation to visit the mainland, and then President Jiang Zemin and Vice Premier Qian Qichen met with Koo separately. In Shanghai, Wang Daohan and Koo Chen-fu met twice and reached a "four-point agreement," including conducting political and economic dialogues, strengthening exchanges and mutual visits between ARATS and SEF personnel at different levels, and inviting Wang Daohan to visit Taiwan in due time.

Koo's visit to the mainland and the top-level contact and dialogue across the Straits broke through the taboo set by the Taiwan authorities on cross-Straits high-level political contact and started de facto political dialogue. After that, ARATS and SEF held two talks at the level of deputy secretary general, and it was determined in principle that ARATS President Wang Daohan would visit Taiwan in the autumn of 1999. In July that year, Lee Teng-hui put forth a "two-state theory," and consequently ARATS and SEF once again halted contact, exchange and dialogue. Wang's Taiwan-visit plan was also aborted. After taking power, Chen Shui-bian refused the one-China principle. By openly denying the "1992 consensus," he advocated "one country on each side," making it impossible to resume ARATS-SEF dialogue and consultation. Political impasse across the Straits continued.

It is proven that cross-Straits consultation and dialogue based on the "1992 consensus" can play a positive role in solving specific problems in cross-Straits exchanges, safeguarding the legitimate rights and interests of compatriots on both sides and promoting cross-Straits economic and trade cooperation and exchanges in other fields. More importantly, they serve as a major indicator to show whether or not the political relations between the two sides are relaxed. Cross-Straits consultation and dialogue based on the one-China principle undoubtedly help alleviate relations, while the denial of the "1992 consensus" undermines cross-Straits consultation and dialogue, which inevitably leads to political tension and confrontation between the two sides.

II. The Wang-Koo Talks have promoted cross-Straits exchanges

Although the Taiwan authorities adopt the policies of "being patient and exercising forbearance" and "active opening and effective management" in economic and trade relations with the mainland, trade and economic cooperation between the two sides have witnessed remarkable progress, thanks to the alleviated atmosphere resulted from the Wang-Koo Talks, together with the joint efforts of the business communities on both sides.

Indirect trade across the Straits has grown rapidly, economic cooperation has expanded in terms of scale and range, and a situation of complementation and mutual benefit is taking form. In 1993, the cross-Straits trade volume approximated US$14.4 billion, a 94.26 percent increase over 1992. In 2002, the trade volume reached a historic high of US$44.6 billion. According to statistics released by the former Ministry of Foreign Trade and Economic Cooperation, the cross-Straits trade volume during 1993-2002 amounted to US$235 billion, eight times that during 1978-92. To date, the two sides are major trade partners for each other. The mainland market is becoming a main force driving Taiwan's economic growth, and the mainland (including Hong Kong) has replaced the United States to become Taiwan's largest export market and largest source of trade surplus. During 1993-2002, Taiwan's trade surplus over the mainland exceeded US$150 billion, around eight times that prior to 1993.

Taiwanese investment in the mainland has become an important component of the cross-Straits economic relationship. The year when the Wang-Koo Talks were held saw the first surge of Taiwanese investment in the mainland, with the conclusion of more than 10,000 Taiwanese-funded projects involving US$9.97 billion in committed capital and US$3.14 billion in paid-in capital, a rise of 70.27 percent, 79.78 percent and 198.95 percent over 1992 respectively. Since 2000, Taiwanese investors have overcome the blockade of the Taiwan authorities to bring about the second surge of investment in the mainland. By the end of 2002, the number of Taiwanese-funded projects in the mainland had reached 55,000, involving around US$33.1 billion in actual investment. During 1993-2002, Taiwanese invested in more than 40,000 projects in the mainland that involved US$31 billion in actual investment, marking over four times and 16 times the total prior to 1993 respectively.

Taiwanese investment in the mainland has the following salient characteristics: First, investment focus has been shifted from small and medium enterprises to large enterprises, and from labor-intensive businesses to capital- and technology-intensive businesses, and large enterprises, large projects and hi-tech enterprises have gradually become the main targets of Taiwanese investment. Second, investment has expanded in geographical terms, with investment hotspots shifting from coastal areas to central and western regions. Third, the range of investment has been broadened, from such traditional industries as foodstuffs, light industry and garments to banking, insurance, health care, telecommunications and aviation. And fourth, Taiwanese companies have speeded up the transfer of R&D bases to the mainland.

Meanwhile, various exchanges between the two sides have experienced noticeable development. First, the range of exchanges has kept broadening, deepening and specializing, with more and more academic exchanges and exchanges in technology-based industries. Second, the scale of personnel exchanges has been enlarged. From 1993 to the end of 2002, the number of people involved in cross-Straits exchanges totaled 23 million (22.3 million Taiwan compatriots visited the mainland while 700,000 mainlanders visited Taiwan), more than five times the aggregate number during 1987-92. Third, high-level exchanges have increased. After the Democratic Progressive Party took power, Kuomintang Vice Chairmen Wu Po-hsiung and Vincent Siew visited the mainland in 2000 and 2001 respectively. They are the highest-level Kuomintang leaders visiting the mainland ever since the Kuomintang went to Taiwan. Cross-Straits exchanges and personnel contacts have produced far-reaching influence on the inheriting and carrying forward of fine Chinese cultural traditions by compatriots on both sides of the Taiwan Straits, as well as promoting their mutual understanding and trust.

III. Cross-Straits direct route has achieved partial breakthrough and the postal link has obtained substantive progress

For a long time, the Taiwan authorities have regarded the "three links" (links of mail, trade, air and shipping services) as the political bargaining chips to seek for "equal political entities on the two sides of the Taiwan Straits" and "state-to-state three links." Under multiple pretexts such as "Taiwan security," "official negotiations" and "international air routes," the Taiwan authorities had stubbornly refused to open postal, aviation and navigational services and commercial interflow. But with the rapid development of cross-Straits economic relations and various exchanges following the Wang-Koo Talks, complete opening of the three aspects, especially the "direct route" between the two sides, has become a natural need for promoting cross-Straits relations and the economic growth on the Taiwan Island. With the strong calls of compatriots and business communities on both sides, especially from the mainland, the direct route between the two sides has gradually made progress.

In April 1997, a "trial direct route" was launched between mainland’s Fuzhou and Xiamen cities and Taiwan’s Kaohsiong City, putting an end to the 48-year history of no commercial shipping services between the two sides.

On August 6, 2001, Taiwan's "ministry of transportations and communications" approved Kaohsiong to handle the "water-and-air through transport operations" with the mainland, making direct route between the two sides take a "small but crucial step."

Beginning on January 2, 2001, the Taiwan authorities decided to open step by step direct exchanges of goods and personnel between Taiwan’s Kinmen and Matsu and the mainland’s coastal Fujian Province.

In June 2002, the Taiwan authorities allowed Taiwan goods and personnel to go to the mainland via Kinmen and Matsu in a limited manner, and opened the "mini three links" on the Penghu Islands in a limited manner.

The mainland-controlled Air Macao and Dragon Air (Hong Kong) began from December 1995 and August 1996, respectively, to fly across the Taiwan Straits without changing planes at Macao and Hong Kong airports, so long as they change the flight number.

In early 2003, Taiwan business people on the mainland returned to Taiwan for the Spring Festival by charter flights. This was the first time since 1949 that Taiwan civil flights had ever flown to the mainland, which laid bare the lies of the Taiwan authorities that "direct route between the two sides is unfavorable for Taiwan's security," causing a strong stir on the island.

To facilitate communication between the two sides of the Taiwan Straits and create conditions for business exchanges and personnel contacts, the mainland has made regulations on mail and telephone exchanges across the Straits. Many other practical measures have been adopted to promote the postal services across the Straits. The Wang-Koo Talks concluded the Agreement on the Inquiry of and Compensation for Registered Mails Across the Straits. In June the same year, the two sides began the services of registered mails. Various postal services across the Straits have basically opened, so the "postal link" has made substantive progress.

Cross-Straits cooperation in telecommunications has scored astounding progress after many twists and turns. Apart from joint participation in the investment in the "Eurasia submarine cable," related departments on both sides have also reached a consensus on investment in the mainland-led "China-US submarine cable" project. In August 1998, the ST-1 communications satellite, a Taiwan-Singapore cooperation project, was successfully launched. The Taiwan authorities allowed the Chunghwa Telecom Co. Ltd. to engage in cross-Straits direct broadcast business through this communications satellite, creating conditions for the opening of telecom services across the Straits.

Currently, there are more than 3,000 direct cables and satellite circuits between the two sides, facilitating telephone, telegram, data communications, e-mail and mobile phone roaming services. Taiwan-bound telecom volume now comes second of the mainland's total out-bound services, only next to Hong Kong. Meanwhile, mainland-bound telecom volume ranks first of Taiwan's out-bound services, accounting for 30 percent.

As postal and telecom links between the two sides are indirect, service charges cannot be directly settled (the settlement must be conducted by means of a third party). This not only increases operational costs on both sides, but also hinders the further development of telecom services across the Straits.

(The author, Peng Weixue, is an expert with the Institute of Taiwan Studies under the Chinese Academy of Social Sciences.)

(China.org.cn May 7, 2003)