Strait Up: It's Diplomacy by Karaoke

Eric Ellis, Mawei, Fujian Province

06/28/1994

CLICK go the shears isn't a tune that one immediately associates with international diplomacy, particularly a dispute as poisonous as the one that that separates the two Chinas, the communist mainlanders and the nationalists on Taiwan

But on most nights at the earthy International Seaman's Club at Mawei, the closest mainland port to Taiwan, the old outback shearer's ditty unites Chinese in ways their politicians probably never will.

The song is a favourite on the karaoke machine at the club, which attracts backslapping mariners from both sides of the Taiwan Straits for some serious boozing and renewing contacts cut by the 45-year-old division of China. Tied up at the Mawei docks, two ships that officially are not supposed to be there are unloading plastics and electronics and loading up with rice and vegetables. They are from Matsu, the Taipei-controlled island just 2,400 metres off the mainland coast. And when they are done, they will sail off to Matsu and do the same thing in reverse.

It was here and at Quemoy Island (Qinmen), south of Mawei off the coast of Xiamen, that the world very nearly went to war in 1958 when the two sides bombarded each other, Taiwan with Washington's support, Beijing with the Soviet Union's.

The legacy of that engagement is a mainland coast that bristles with weapons while the nationalist islands are pitted with bunkers.

But the lure of lucre has revealed all that military might to be useless and unnecessary.

While old warriors in Beijing and Taipei look the other way, Mawei and Matsu daily trade in flagrant breach of laws forbidding direct contact. New Taiwan dollars circulate on the mainland, renminbi on Matsu. Both sides prefer US greenbacks.

Local journalists say the trade has been going on for years, but has gathered pace since 1986, when the Taiwan Government relaxed its controls and"allowed" its 20 million people to visit, trade and invest on the mainland.

The Mawei-Matsu trade is small-scale but is rich in symbolism and local defiance of their respective leaderships.

Indeed, so close are the two ports in customs and contact that both share the character for horse in their names, "ma". "We have a saying here that if the politicians open the gates, the two horses will be able to run freely,"says Mr Wang, chief editor of the Fuzhou Daily News.

Taiwan officially has as much as $US5 billion ($6.8 billion) invested in Fujian province. Unofficially, the number could be as much again. Total trade across the strait, via Hong Kong, is estimated at about $US10 billion.

Fujian officials say they have parlayed some of that money into new roads, railways, airports and port facilities. Taiwan-only berths have been built in Xiamen, Mawei and Shanghai, where Taiwanese have become that city's biggest investor.

"We have prepared very strongly for the opening of Taiwan," says provincial vice-governor Mr Wan Juanshing.

China's development, particularly in Fujian, is becoming hooked on Taiwanese money. In many cities, investment from Taiwan and, to a lesser extent from Hong Kong, accounts for 80 per cent of all new monies flowing in.

A local joke has it that if an official is not at his desk, best try looking in the dining rooms of the smart hotels and restaurants where visiting Taiwanese stay and have bought.

But the trans-strait business contact has brought with it as many riches as it has political problems for both sides. Taiwan's economy is becoming increasingly dependent on its investment in the mainland - which can only create difficulties as China allows more and more outside investors into its domestic market.

Typical of this conundrum is the Taiwanese manufacturer Tsann Kuen, which makes household appliances in the foreign trade zone of Xiamen, ancestral home of more than half Taiwan's population.

Tsann Kuen has invested in two big factories in Xiamen mostly because its home island has become too expensive. Just 3 per cent of its current output of irons, coffee-makers and telephones are sold in China - the rest goes to Europe and the US - but this will expand to at least 20 per cent by the year 2000.

It has developed a special brand name for the Chinese market, advertises on the sides of Shanghai buses and recently went public on the Shenzhen stock exchange to raise money for a new factory in Shanghai.

Its office walls are decorated with pictures of visits from the provincial vice-governor and from Mr Li Lanqing, Chinese State councillor and the man considered the factional powerbroker in Beijing.

Interestingly, Tsann Kuen is designated as a foreign company in the eyes of the province and the stock exchange (it has issued B shares available only to foreigners) despite the fact that Beijing constantly claims Taiwan as an"inalienable part of China". Tsann Kuen worries little about politics - only inasmuch as it can grease the path to greater success. It dismisses incidents such as the Qiandao Lake tragedy, where 24 Taiwanese tourists died in mysterious circumstances at the hand of mainlanders, as "irrelevant".

The conundrum is this: the more Tsann Kuen and companies like it expand in China, the more they will see their future as mainland companies -which runs directly counter to Taiwan's political ambitions for enhanced independence.

In other words, the number of Taiwanese people who arrive on the mainland, either as business officials or tourists, is a measure of more than mere personal ties.

The fact that the Taiwanese can cross the strait at all is a measure of Taiwan's political liberalisation.