Billions at Stake for Taiwan Over Mainland Visa Chops

The viability of Taiwan’s biggest infrastructure project in half a century, a massive US$16.5 billion air terminal complex called the Taoyuan Aerotropolis, designed to lure international transit travelers and investors across the Pacific, hangs at least partly on the semantics of passport stamps. It is not an easy question, and the answer to it may imply the growing embrace of Taiwan by the mainland.

The Aerotropolis Project, which would include a free trade zone and an industrial park, requires the relocation of more than 40,000 people on 3,200 hectares of land at the existing Taoyuan International Airport. On completion of the Aerotropolis, the airport will be expanded by another 600 hectares and a third runway will be added.

Taiwan’s Transportation Minister Yeh Kuang-shih, in a February 28 radio interview, said the Aerotropolis is the island’s most important project for next 40 to 50 years, and that if it fails, Taiwan, struggling to keep up with the other Asian Tigers, “might as well say goodbye.”

A crucial part of the Aerotropolis’s success, however, depends on whether the Chinese government will allow its citizens to use it as a transit hub for international flights. It is a sticky political problem. Chinese immigration officials can’t put an exit stamp in a traveler’s passport without acknowledging that Taiwan is not a part of China. Taiwan calls itself the Republic of China and, for political purposes, continues to insist that the 1.3 billion Chinese are part of a renegade government.

That is a bit of sophistry. Taiwan has allowed its citizens to travel to China since 1988 and opened its doors to the Chinese in 2008, but owing to mutual non-recognition between the Republic of China and the People’s Republic of China, passports aren’t used for these trips. Instead, Taiwanese travelers receive “Taiwan compatriot permits” and mainland Chinese receive “Exit & Entry Permits for the Taiwan Area of the Republic of China.”

Under Chinese law, however, it’s illegal for Chinese citizens to carry passports next to the Exit & Entry Permit if a transit stop through Taiwan is part of their travel plans. Taiwan’s negotiators, pushed by the Taiwanese airlines, have long been giving their Chinese counterparts an earful to change this.

Taiwan needs these Chinese transit passengers. Due to the country’s superb geographic position, “without that transit ban, the Taoyuan Aerotropolis would catch both North America-bound passengers from Southern China and people from Northern China going to Southeast Asia and Australia,” said Wong Jinn-Tsai, professor at Taiwan’s National Chiao Tong University’s Department of Transportation and Logistics.

“They can fly from China’s big cities directly, but many Chinese live in second and third-tier cities, which are well connected to Taiwan through over 500 weekly cross-strait flights.”

An opening would cost Hong Kong, Beijing, Korea and Japan dearly, as they are now popular transit hubs for North America and Southeast Asia-bound Chinese, Wong said.

Other Taiwanese industry insiders estimate that scrapping the transit ban would increase passenger numbers at the Aerotropolis by 20 percent to 30 percent. They believe that the Taiwan transit option would be very attractive not only with Chinese citizens but also with nearly 1 million Taiwanese China-based expatriates.

“We will ask the authorities involved to figure out feasible solutions and hopefully exchange views with China in two months,” said Chang Hsien-yao, deputy chairman of the Straits Exchange Foundation (SEF), Taiwan’s agency for cross-strait negotiations, on March 1. “[During recent bilateral talks], both sides agreed to study the possibility of allowing cross-strait layovers, exploring new routes and shortening travel times to meet increasing travel demand.”

Political scientists cautiously optimistic Wu Yu-Shan, director of the Institute of Political Science of Academia Sinica, Taiwan’s most prestigious research institution, said that if Transportation Minister Yeh was right with his bizarre wakeup call, Beijing holds the power to make or break Taiwan's economy since Chinese transit passengers would be the key to the success of the Aerotropolis.

“[China’s nod] is unlikely, unless some arrangement can be made to demonstrate that mainland travelers are reentering a Chinese territory when they transit through Taoyuan Aerotropolis,” Wu said. He added that such an arrangement would have to be much more convenient than the current pass that mainlanders have to acquire prior to coming to Taiwan, as otherwise they would have no incentive to transit through Taiwan.

“It is up to Beijing, of course, but an easy-to-get special pass for transiting through Taiwan would do the job,” he said.

Steve Tsang, director of the University of Nottingham’s China Policy Institute, agreed that things will proceed without Taiwan conceding to the protocol nightmare of having an actual Chinese immigration booth set up on its soil. He emphasized that the Chinese are not going to Taiwan, just transferring flights at the Taipei airport, and that most countries do not follow US rules by which anyone passing through a US airport en route elsewhere needs to deal with customs before flying on to another country.

“It does not need to be an issue unless Beijing wants to make a point of using the transfer to assert sovereignty over Taiwan,” Tsang said. “The way forward is one of fudging or avoiding the issue.”

Taiwan’s dangerous trade-off? In previous cross-strait negotiation rounds, whenever the Taiwanese have called for the scrapping of China’s transit ban, the Chinese have replied that Taiwan should first allow passenger flights to cross the median line of the Taiwan Strait if it genuinely wishes to make things more convenient. Taiwan has steadfastly rejected this demand for security reasons, so that currently all flights detour either over the South China Sea or the East China Sea. Unsurprisingly, when industry insiders began talking about a possible breakthrough on the transit issue after the latest round of talks, speculation emerged that Taiwan would be about to agree to a trade-off.

The straits exchange body’s deputy chairman Chang vehemently denied that, however, and a US-based China defense expert argued that Taiwan’s Ministry of Defense considerations need to be paramount as the Taiwan-China air transport relationship proceeds.

“Taiwan has absolutely no ‘depth’ in geography meaning the PLA's very forward deployed and massive forces can be mobilized at increasing speeds,” said Rick Fisher, Senior Fellow at the International Assessment and Strategy Center. “Militarily, China-Taiwan relations remain on a hair trigger, and allowing air passenger traffic to complicate even further an already dense Taiwan Strait air defense environment is not in Taiwan's interest as long as China is preparing for war against the island democracy.”