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Last Updated: Friday, 21 March 2008, 00:05 GMT
China trade links are key in Taiwan poll
By Paul Moss
BBC News, Taipei

Dr Ho Szu-yin has all the enthusiasm you expect of somebody who thinks he has the answer to a problem.

Supporters of opposition Kuomintang Party (KMT) at a presidential election rally
But what does China think of the KMT's common market idea?

The problem is Taiwan's faltering economy.

Although the island continues to show decent growth figures, it certainly has not kept up the kind of breakneck expansion it had in the 1990s, when Taiwanese laptop computers and other electronic gizmos dominated the world.

Since those heady days, inflation and unemployment have gone up, while real wages have gone down.

Enter Dr Ho and his solution.

He, and the KMT party he represents, want to negotiate a "common market" with mainland China, a free trade area, which he believes will help pull Taiwan out of its financial doldrums.

And the party has made this a key policy for the presidential election this coming Saturday.

"The integration of business, more trade from the other side - we'll increase our income," Dr Ho says, "and achieve higher economic growth."

Trojan horse?

Now, free trade deals have proved controversial in many countries. And there are echoes of old arguments here in Taiwan, where opponents fear that cheap Chinese imports will edge out their own products.

Some have also argued that a deal would allow Chinese people to come and work in Taiwan, their lower wages putting downward pressure on everyone else's.

But these economic arguments are nothing compared to the more dramatic fears unleashed by the common market proposal.

Ma Ying-jeou, the KMT's presidential candidate
The KMT ruled Taiwan as a one-party state until the 1990s

"Before, China tried to use military force to take over Taiwan," one opponent told me. "Now they have another strategy, they use the economy."

We were speaking at an election rally for the rival Democratic People's Party, where a mock Trojan horse was placed on stage, to show what they thought of letting too much Chinese business into Taiwan.

"I am very, very angry about this proposal," another DPP supporter shouted, and his loud voice and fierce expression suggested he meant it.

"China wants to use the common market policy to control Taiwan."

It certainly is China's long-term mission. Taiwan broke away from the mainland in 1949, when the Communists took over.

But the government in Beijing has never recognised Taiwan and has reserved the right to use force in order to take it back one day.

But in the meantime, business is business. There is already billions of dollars of trade and investment between Taiwan and China, and there are people on both sides who would like to increase that.

Older divisions

Down at the famous Raohe night market in the capital, Taipei, I found stallholders anxious to build better relations with their neighbour.

"Taiwan needs Chinese people," one told me, "because they're rich guys. They can help us to make money."

The disagreements on this issue have brought out a much older division here. Taiwan has always been to some extent split between the indigenous people, who have been on the island for many generations, and those who fled here in 1949 along with their descendents.

A supporter of Taiwan's ruling Democratic Progressive Party presidential candidate Frank Hsieh wears a campaign sticker on his forehead
The DPP is looking beleaguered ahead of Taiwan's presidential poll

Broadly speaking, but by no means universally, the indigenous Taiwanese tend to be more wary of Chinese influence and tend to be more keen on Taiwan going its own way.

Their view is articulated most closely by the DPP, but the party is not doing well.

It lost power in Taiwan's parliament in January. And now its presidential candidate, Frank Hsieh, is running second in the polls for Saturday's vote.

Lin Chong-pin once served as deputy defence minister under the current DPP president, but I found him in a despondent mood.

Whereas he once saw his job as guarding against Chinese missile attack, he insists the biggest threat now is more intimate relations with China - economic or otherwise.

"China wants to absorb Taiwan," he insists, "and this is their new strategy. We don't see fire, we don't see smoke, we don't see bullets. So people in Taiwan are not aware of the danger."

Paul Moss' report was broadcast on The World Tonight on BBC Radio 4 on Thursday 20 March, 2008.

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