On October 15, a group from the ROC headquarters of the World League for Freedom and Democracy, led by former Legislative Yuan vice-speaker Yao Eng-chi, met in Beijing with PRC vice premier Qian Qichen. During their talks Qian stated that there is no need to specifically designate direct maritime and air routes between Taiwan and mainland China as being either "domestic" or "international," but that these could simply be defined as "cross-strait."

Thereafter, on several occasions, Qian and other ranking PRC officials emphasized "separating economics and politics" in cross-strait issues. That is, direct links could proceed without the "one China" precondition. Instead, based on the model used for shipping and travel between Taiwan on one side and Hong Kong or Macao on the other, non-governmental actors could negotiate directly among themselves, with the government playing only a facilitating role. However, Qian insisted that if the two governments were to resume dialogue, then Taiwan would have to "recognize one China" as a precondition.

ROC president Chen Shui-bian's initial response was to "welcome" Qian's comments about how to define direct links, and to see these remarks as a friendly gesture from the PRC. He said that his administration has always made direct links an important policy goal, but that it has been necessary to move cautiously in the absence of congenial talks between the two sides in order to ensure that Taiwan is not "demeaned, localized, or marginalized" and that national security and the national interest are taken into account.

Premier Yu Shyi-kun, meanwhile, stressed that "direct links are not a panacea for Taiwan's economic ills," and hoped that people would not have unrealistic expectations for the three links. Taking Hong Kong as an example, he notes that it enjoys virtually obstacle-free economic relations with the PRC, but this has not saved it from its current crises of collapsing real estate prices, rising unemployment, and business bankruptcies. He said that focusing on the three links is not as important as improving Taiwan's investment climate so that firms will keep their core operations in-and their attachments to-Taiwan.

The fact that the PRC is clearly stating its willingness to separate direct links from politics at this juncture is probably related to the upcoming 16th National Congress of the Communist Party in November, at which there is supposed to be a succession in the leadership. If PRC president Jiang Zemin can achieve a breakthrough in what the PRC calls "Taiwan work" before he withdraws from the center of the political stage, this would enhance his standing in history. On the other hand, if for various reasons direct links remain closed, the PRC can nonetheless argue to third parties that it has demonstrated goodwill, so that it is no longer held responsible for "blocking direct links for ideological reasons."

It is important to also note, however, that on October 20 Qian Qichen commented that the PRC has made "resolving the Taiwan problem and achieving reunification" one of the three main tasks of the new century, and in this process the PRC will "pin its hopes on the broad mass of compatriots in Taiwan." From this point of view, opening direct links certainly embraces the PRC strategies of "promoting unification through economics" and "applying pressure to the political authorities in Taiwan by winning allies among business elites." Moreover, the PRC seems willing to proceed with direct links even though these would greatly cut into transshipment trade in Hong Kong and Macao, thereby damaging the economies of those two places.

In contrast to the low-key response of the ROC government, the private sector has responded to Qian Qichen's remarks with renewed enthusiasm for direct links. After he proposed defining direct links as simply "cross-strait" shipping and travel, the Taiwan stock market rose 500 points in a week. Meanwhile figures from across the social spectrum, including Academia Sinica president Lee Yuan-tseh and Acer Group chairman Stan Shih, opined that the government should make good use of this opportunity to open direct links.

Kuomintang legislator Chang Hsiao-yen held preliminary discussions with representatives of the airline industry in Taiwan, after which they proposed a charter-flight model of company-to-company interaction which would not involve negotiation of air rights. Chang said they hoped to begin trial one-way runs from Shanghai to Taipei by the end of this year, so that travel would be much easier for Taiwanese businessmen hoping to return home for the next Lunar New Year holiday. The likelihood of this was much reduced, however, when the Executive Yuan declared that the government would have to play the guiding role in "direct travel under any guise."

Meanwhile, local governments hoping to grab a piece of the expanded market that would result from direct links are seeking permission from the central government to establish bases for direct travel and transport by sea or air. Legislators have even proposed "city-to-city links" in which authority over direct travel and transport would be delegated by the central government to local governments. The rapid response by both the private sector and local governments has put pressure on the Yu cabinet as it seeks to deal with the direct links issue.

Purely from an economic perspective, direct links between the two sides would be of great benefit to the estimated 60,000 Taiwanese firms with operations in the PRC. It is estimated that cross-strait shipping costs would fall by 60% on average. An air journey from Taipei to Shanghai would be reduced from the current seven hours (stopping over in Hong Kong or Macao) to 90 minutes. When you consider that Taiwanese make 3.5 million round trips per year to the mainland, the total savings in time and money would be astonishing.

Besides questions of efficiency, the opening of direct links would also symbolize the full normalization of cross-strait economic relations, which is very important to keeping Taiwan attractive to foreign investors. Recently the European Chamber of Commerce Taipei released its annual recommendations to the government, one of which is that Taiwan must speed up opening of direct links. The ECCT argues that this is the only way that Taiwan will be able to play an even more important role in the Greater China economy, and avoid the fate of being marginalized in the process of globalization.

What will happen now? Keep an eye on, for one thing, the draft amendments to the statute covering relations between the people on the two sides of the strait, now before the legislature, which should spark enormous controversy. The evaluation report on direct travel and transport currently being prepared by the Mainland Affairs Council, due out at the end of November, will be another important indicator.

Whatever the government decides, it should clearly explain itself to the public. Direct links may be more than just a potential pathway to peace and prosperity for the two sides of the Taiwan Strait: They may also present an opportunity to harmonize opinion in Taiwan, so that Taiwan will be even stronger and more united for challenges to come.