Politically, Chinese mainland and Taiwan didn't break the stalemate despite repeated goodwill gestures by the central government.

In October, Vice-Premier Qian Qichen de-politicized the definition of direct transport links between Taiwan and the mainland. He told the Taipei-based United Daily News in an interview that direct air and shipping links between the two sides could be called "cross-Straits" instead of "domestic". The strategic change was widely seen as a major effort by Beijing to push ahead "three links", namely trade, transport and postal services.

"The 23 million Taiwan compatriots are our brothers and sisters of the same blood, among whom none is more eager than we to resolve the Taiwan question through peaceful means." At the 16th Communist Party Congress, President Jiang Zemin was again reaching out for Taiwan compatriots. He urged Taiwan authorities to shelve political disputes and resume dialogues. Under the one China principle, he said the two sides could touch on three topics: how to put an official end to hostility, the international space for the island and the political status of Taiwan.

"The proposal points out a clear road to the resumption of cross-Straits negotiations and bring brighter prospects for peaceful national reunification. This is the most concrete and feasible proposal that has ever been made in a party congress," said Zhang Mingqing, spokesman of Taiwan Affairs Office of the State Council.

However, for Taiwan leader Chen Shui-bian, it was a totally different story. On August 3rd, he told a gathering of pro-independence activists that there was one country on each side of the Taiwan Straits. This provoked Beijing's anger, who accused him of tearing up the "one-China" doctrine.

One of the most renowned Taiwan watchers Guo Zhenyuan, senior research fellow of China Institute of Int'l Studies on the mainland said Chen made the remarks for his own political interests.

"Chen Shuibian runs in the same line with his predecessor Lee Denghui. Whenever his political situation on the island or on the international stage is in trouble, he will make trouble in cross-Straits relations. This is one of his major tactics to reverse the situation," said Guo.

This year, protests rose one after another across the island, urging the local authority to stimulate the sagging economy. But Chen cannot accomplish this without the mainland, according to Chinese analysts.

Though politically in stalemate, cross-Straits economic links are gaining big momentum this year.

"After the two sides both joined the World Trade Organization late last year, cross-Straits trade witnessed a new surge. Taiwan's exports to the mainland grew by 30 percent, and the mainland surpassed the US and became the biggest export destination for Taiwan. It is also a new engine to drive the island's economic development," said Wang Jianmin, research fellow of China Institute of Taiwan Issues.

Today, companies from Taiwan have mushroomed to more than 65,000 on the mainland. But the island is far from open to mainland enterprises. Still a great impediment exists indirect mail, trade, air and shipping services. The Taiwan Council of Economic Planning and Development estimates direct links, if materialized, could save Taiwan businesspeople 700 million US dollars each year.

Chairman of Taiwan Compatriot Investment Enterprises Assoc. of Kunshan Qi Daofu said: "All the Taiwan investors on the mainland hope we can have direct links so we can cut costs and time."

Meanwhile, the mainland has also reached out to help ease water shortages in Taiwan. Full loads of fresh water were pumped into Taiwan Island, where it was most in need. Links for the two sides will reach for no return as people-to-people exchanges are also on a steady rise. In February this year, a Buddhist relic was escorted to Taiwan for show. This was warmly welcomed by Taiwan people as both sides share the same cultural heritage and roots.

Taiwan's economy is closely connected to that of the Chinese mainland. With a trade surplus of nearly 20 billion US dollars with the mainland in recent years, experts from Taiwan say the mainland has served as a strong source of momentum to the island's economy.

Recent figures show that the Taiwan region's exports to the mainland reached nearly 24 billion US dollars in the first 9 months of this year, accounting for 25 percent of the island's total exports. This represents a 36-percent rise over the same period in 2001. Its trade surplus with the mainland has directly boosted its economy.

Yin Cunyi, deputy director of Taiwan Research Center, Tsinghua University, told reporter, "The active trading further strengthens the economic ties between the Taiwan region and the Chinese mainland. I am sure there will be no dramatic changes in such stable relations."

Some predictions say Taiwan's GDP will only grow by 3.27 percent this year.

Contrary to the sluggish local economy, investment in the Chinese mainland is a popular choice to many business people. In the first 10 months of this year, investment in the Chinese mainland hit an all-time high, reaching 3 billion US dollars, up more than 30 percent. The vast market and cheap costs on the mainland contribute to the charisma attracting Taiwan business people.

(CCTV December 22, 2002)