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China, Taiwan Approaching Talks on Opening Business Links

China and Taiwan are moving toward talks on opening direct business links across the Taiwan Strait.

Beijing and Taipei this week have been publicly outlining ways to resume stalled talks on trade, transport and postal links.

In Taipei Thursday, Tsai Ing-wen, head of Taiwan's Mainland Affairs Council, said Taipei will authorize private, non-profit groups to represent it in talks on re-opening direct links with China.

However, she told the island's legislature that Taiwan laws prevent individuals from representing Taipei.

China this week had picked up on an earlier Taiwanese offer to proceed with negotiations by using non-governmental parties. Chen Yunlin, director of Beijing's Taiwan Affairs Office, went so far as to name two leading Taiwan businessmen as favorable candidates to spearhead talks. China and Taiwan have been governed separately since 1949, when Nationalists fled to Taiwan as the Communist Party took over mainland China. There are no major direct links across the Taiwan Strait, and the last round of talks to re-open them stalled in 1999.

Ms. Tsai said that with China's cooperation, direct links could be open by 2004.

Earlier this month, Taiwanese president Chen Shui-Bian, under pressure from business groups, said Taipei would not object to having private groups discuss direct links with Beijing. He previously resisted calls to involve the business community, for fear of negating Taipei's authority. Beijing has always maintained it is the island's legitimate ruler.

Andy Xie, the chief economist at Morgan Stanley Asia, said Taiwan has more to gain from the so-called three links than does China.

"Most politicians vaguely understand the linkages are very much in Taiwan's favor. But in fact the linkages are the key to keeping Taiwan relevant to East Asia. Without the three linkages Taiwan will become just another island," Mr. Xie said.

Taiwan's high labor costs have pushed manufacturers to move factories to China. Taiwan companies have invested around $60 billion in China, but people and cargo to and from the mainland must transit through a third destination, such as Hong Kong. Direct links would eliminate such extra costs.