Prepared by the Mainland Affairs Council
October 2, 2000
Background
A. The "Statute of Off-shore Island Development" (hereinafter referred to as the "Statute") passed by the Legislative Yuan on March 21, 2000, and was put into effect on April 5. In compliance with an Executive Yuan directive, the Mainland Affairs Council (hereinafter referred to as the "MAC"), in accordance with Article 18 of the Statute, undertook a study to evaluate the impact of passenger, goods and other relevant commercial activities that would result from the shipping link between the mainland and the off-shore islands of Kinmen, Matsu and Penghu. The links between these off-shore islands and the mainland are often referred to as the "three mini-links" (hereinafter referred to as the "TML"). Taking account of the spirit of the Statute, the aim of the exercise is strengthen and stimulate economic growth and development of these off-shore islands.
B. On June 13, 2000, the 23rd meeting of the Legislative Yuan passed the following resolutions: "First, the government shall complete the assessment of the TML within three months. Upon completion of planning three months thereafter, the government shall immediately try to implement the priority items of (1) decriminalization and (2) the areas within our jurisdiction. Second, within this framework, the government shall first begin, on a trial basis, shipping links that are related to religious purposes. Third, as the government undertakes assessments and plans, it shall, at the same time, exercise its best effort to resume cross-strait dialogue".
C. The Executive Agencies of the government fully respected these resolutions of the Legislative Yuan and vigorously proceeded with the assessment of the TML. The agencies involved included the Ministries of the Interior, National Defense, Finance, Economic Affairs, Communications and Transportation; the Council for Economic Planning and Development; the Mainland Affairs Council; the Council of Agriculture; the Coast Guard Administration; and the national security agencies. The assessment was conducted in two stages by the relevant agencies in accordance with their expertise, with the MAC responsible for coordinating and integrating the findings to complete the overall report.
I. An overview of the key points of the assessment results
A. Opening up the TML would be conducive to: stimulating the economic development of the off-shore islands, attending to the islanders' daily needs in life, reducing illegal TML activities, cutting down on the rate of crime committed by the islanders, increasing opportunities for interactions between the two sides. However, when the mainland continues to threaten Taiwan with the use of military force, the hasty opening of the TML would undermine the security of the off-shore islands and this would, in turn, affect the defense operations of the main island of Taiwan. At the same time, the TML could lead to drastic increases of illegal entry, smuggling, stowaway, overstaying, unlawful working problems, resulting in social order concerns.
B. Following impact assessment studies on national security and economics, the TML would be implemented in a gradual, step-by-step manner, along with the complementing administrative measures to ensure effective risk management.
1. Implementation areas: Kinmen and Matsu would be given the first priority. After the normalization of operations, an evaluation would be conducted on the possibility of links between Penghu and the mainland.
2. Mode of opening-up and limitations: Taking account of the defense operation and the burden of security checks, the TML should be expanded gradually according to the principles of "goods before passengers" and "sea traffic before air traffic". The scale of the transportation links and the number of passengers and the volume of goods should also be limited.
3. Transshipment or side-trips calls: Taking account of policies toward the mainland, national security, and long-term economic prospects, transshipment and side-trip calls should not be permitted. However, if necessary, permission may be considered on a special case-by-case basis, e.g., religious voyages.
II. An item-by-item summary
A. Shipping link
1. Form of sea transportation: At the initial stage, air traffic would not be opened. Sea transportation should be limited to one port per region and to be in the form of "fixed point, fixed period, and fixed course".
2. Selection of ports and courses: At the initial stage, the ports with the most advantageous conditions are Liaoluo at Kinmen and Fuao at Matsu. In order to facilitation administration, the Kinmen-Xiamen and Matsu-Fuzhou routes should be selected.
3. Vessels used: In principle, only passenger and cargo ships are to be used, but not fishing boats. Taking account of decriminalization, fishing boats refurbished for passenger-cargo service would be administered in accordance with the Law of Ships and the Law of Marine Transportation.
B. Merchandise trade
1. Categories to be opened-up: In opening-up the trading of goods, priority would be given to full-fill the basic needs of the residents on Kinmen and Matsu. The next order of priority would be the transshipment of semi-processed goods and side-trip transshipment would not be permitted.
2. Items to be opened-up: The list of items to be opened up should be lengthened gradually and implemented on a step-by-step basis. Results from preliminary consultation with the relevant agencies show that the trading of goods in the future should exclude transshipment (the export of goods from Taiwan to the mainland via Kinmen and Matsu or the import of goods from the mainland to Taiwan via Kinmen or Matsu). Under this premise, the items to be opened-up for trade are planned as follows:
(a) Imports: At the initial stage, the main effort should be directed at decriminalization (i.e., legalizing some of the current activities). A negative list system would be adopted. Goods that were previously publicly announced and permitted for indirect imports would be implemented as the first step. In the next step, the list of items would be expanded according to the needs for growth and development of the off-shore islands.
(b) Exports: Other than items that are prohibited from exports, no other restrictions would be imposed.
(c) Decriminalization: Considering the need for decriminalizing the illegal activities and for juicing up the economy, the items permitted for imports in the first stages of the opening-up may be increased provided there are companion measures for tightened smuggling prevention. For that, a quota system may be adopted.
C. Entry and exit of personnel
1. Personnels of Kinmen and Matsu entering the mainland area: Opening-up the entries of residents of Kinmen and Matsu into the mainland area should be limited to activities such as daily necessities, relevant tasks which enhance off-shore island development, and humanitarian reasons. A flexible policy should be adopted with regard to the length of stay and the number of trips.
2. Residents of the mainland area entering Kinmen or Matsu: Taking account of national security, at the initial implementation stage, a quota system would be adopted with regards to the entry of residents of the mainland area into the Kinmen and Matsu areas. The quota would be established realistically, taking full account of the defense capabilities of the two islands, human resources and facilities for security check.
D. Business development
1. Development direction: The TML will contribute to facilitating commercial and industrial activities in the Kinmen and Matsu areas. The policy will be adding more room for development in the fields of commerce and tourism.
2. Development plan: Kinmen and Matsu may plan to establish as a "Center for Trading Goods between the Two Sides of the Strait". Alternatively, a plan may be constructed by further strengthening the existing business foundations.
E. Agricultural and fishery development
1. Development direction: Following the implementation of the TML, agriculture and fishery activities currently conducted on Kinmen and Matsu may be adjusted and developed as recreational activities.
2. Precautionary measures: The implementation of the TML requires the strengthening of sanitary and phytosanitary measures, in particular, for animal and plants. At the same time, agricultural products imported from the mainland to Kinmen and Matsu should be restricted from entering Taiwan proper.
F. Water "link"
1. Need for water "link": Following the implementation of the TML, tourism and business activities are expected to increase, which could result in the shortage of water supply in the Kinmen area. Therefore, it would be advisable if a mainland water supply could be secured.
2. Conditions for water "link": Securing water supply from the mainland would depend on the cross-strait relationship and effective risk management. Furthermore, we should ensure that water consumption by the military and the local civilian population would not rely on the mainland supply.
G. Supply of electricity
1. Power supply: Kinmen and Matsu are both expected to meet the demand for power following the implementation of the TML. (According to the existing plan on power supply, Kinmen can cope with the demand for the next five years after the establishment of the links, whereas Matsu has enough power for the next two years.)
2. Long-term consideration: To ensure uninterrupted power supply on Kinmen and Matsu, this would require the relevant agencies to provide assistance in terms of the construction of power plants or the installation of new power generating systems, in addition to making long-term plans.
H. The question of decriminalization
1. The meaning of decriminalization: Decriminalization aims to tackle illegal TML activities such as the smuggling of goods, illegal entry and exit of personnel, illegal sailing of boats directly to the mainland, and illegal hiring of mainland fishermen or laborers. These activities would be legalized through the measures to open-up or the enactment of the relevant measures under the criminal code. This would legalize the existing activities or lessen the severity of punishment on such activities.
2. Policy direction: In view of the closeness of the relationship between the Kinmen and Matsu area with the mainland area as well as the basic needs of local residents, if the activities undertaken were based on basic needs and have no effect on national security (e.g., smuggling of mainland products due to basic necessities), such activities would be given priority or the relevant restrictions would be adjusted. These areas would be considered for decriminalization. In contrast, should the activities affect national security or are not related to local necessities (e.g., smuggling of mainland products to Taiwan), such activities would not be considered for decriminalization.
III. Direction of the preliminary TML plan
A. Principles of the plan On the basis of the results of the assessment outlined above and in consideration of the long-term development of the cross-strait relationship and accession to the WTO, the following principles would serve as the guideline for establishing the TML:
1. National security as priority The implementation of the TML is contingent on the assurance of national security, which must be clearly defined and manageable.
2. Continue with the legislative spirit of the Statute The plan for TML was undertaken in accordance with Article 18 of the Statute and therefore, should conform with the legislative spirit of the Statute.
3. Integrating and complementing the "three links" with WTO rules The TML covers the movement of people, goods and commercial activities resulting from direct transportation. Such activities are highly relevant to our WTO membership and the "three links" policy of the government. Therefore, the planning of TML should take due account of WTO rules as well as existing policy on the "three links" when the overall policy is being considered.
4. Establishing a stable and normal cross-strait relationship The government aims to begin establishing a stable and normal cross-strait relationship and would consistently review short-medium-and long-term conditions so as to effectively implement a progressive approach, i.e., "an overall plan with a phase-by-phase approach" towards implementation of the plan.
(a) The implementation of the TML should be forward-looking on the development of the cross-strait relationship and follow the principles of "two-way interaction" and "mutual benefit and reciprocity". The comprehensive plan would be based on the widest possibility of opening-up. However implementation of the plan would need to account for national security risk management, along with the prevailing conditions, and to be implemented in stages.
(b) On timing, in the short term, opening-up would be limited to goods, personnel, vessel, and financial exchanges. Medium- and long-term plans would complement the "three links" policy and the normalization of trade and economic relationship between the two sides of the Strait. This could mean a complete normalization of exchanges of goods, personnel, vessel and finance between the off-shore islands and the mainland area.
(c) On implementation, at different stages of the plan, we will be taking account of the cross-strait relationship as well as the prevailing conditions, prior to the implementation of the plan on a step-by-step basis. (For the TML, which applies only to Kinmen and Matsu, short-term priority would be decriminalization as well as areas under our jurisdiction.)
5. Plans for opening up the Kinmen and Matsu areas and the Penghu area are drawn up separately because of their different conditions The relationship and dependency between the Kinmen and Matsu areas and the mainland area are entirely different from the Penghu area. Furthermore, conditions for development or national security considerations are also different, therefore, plans for the Penghu area would be considered on different basis and planned separately.
B. Contents of the TML and plans for implementation
1. The short term There would be limited opening-up of Kinmen and Matsu to the exchange of goods, personnel, vessel and postal service the Xiamen area of the mainland. Details of the assessment plan are based on these areas. Implementation stages:
(a) Stage one: Priority should be given to decriminalization and implementation of areas within our jurisdiction. The priority order of items to be opened up would be established according to the prevailing conditions. This could include the items already opened-up by the mainland, the reasonableness of mainland's treatment toward our people, and whether our initiative to open-up would lead to further complications and problems.
(b) Stage two: Items identified for further opening-up would be subject to bilateral consultation between the two sides.
2. Medium and long term In view of the "three links" policy and the normalization of trade and economic relations between the two sides, Kinmen and Matsu would be opened up to the normal exchange of goods, personnel, vessel and finance with the Fujian area of the mainland as follows:
(a) The basic framework for short-term operations may be continued with the possibility of further adjusting the relevant restrictions.
(b) The Kinmen and Matsu areas may be used as a midway station for the exchange of personnel and goods between the two sides.
(c) Sea traffic may be further adjusted, whereas air traffic would be determined according to the prevailing condition.
(d) Economic cooperation may be developed with the Fujian area on the mainland. Implementation stages: The implementation plan should be made according to the prevailing condition of development.
C. Details of the TML for the Penghu area and implementation plans
1. Short term With the assurance of national security and according to the need of economic development of the Penghu area, specific items would be opened up, subject to special approval and evaluation on a case-by-case basis. These items would serve as the basis for the trial shipping link between the Penghu area and the mainland area. The plan is as follows:
(a) Imports of specific goods, on a case-by-case basis, from the mainland area (such as gravel).
(b) Cultural exchange activities (such as religious voyage).
(c) Special training and participation in meetings.
(d) Development of software parks.
(e) Agricultural and fishery cooperation between the two sides. Form of implementation: Case-by-case basis with special approval
2. Medium and long term In view of the "three links" policy, the Penghu area would be opened-up to normal trade and economic exchanges with the mainland area. The intention is to establish the Penghu area as an international tourist destination, recreational and convention center. (Details of the plan will be in accordance with the plan for "three links".)