WoW a Formal Truce.... I will drink to that

China Will Use Peaceful Development to Reunite Taiwan (Update2)
http://www.bloomberg.com/apps/news?pid=20601080&sid=aqr3uXRjACaw&refer=asia

By Eugene Tang and Janet Ong

Dec. 31 (Bloomberg) -- Chinese President Hu Jintao said his government will pursue “peaceful development” with Taiwan, in a policy shift that underscores how closer trade ties are changing China’s attempt to reunite with the self-administered island.

The world’s fourth-largest economy, expanding at double the pace of Taiwan’s, is willing to sign a “comprehensive treaty of economic cooperation that complements each other’s competitive advantages” and needs, Hu said today in a televised speech in Beijing. He pledged to protect Taiwan’s investments in China and urged Chinese companies to venture to the island.

China and Taiwan resumed direct flights, shipping and postal services across the Taiwan Strait on Dec. 15, after Ma Ying-jeou was elected as the island’s president in March with a pledge to improve ties with the mainland and abandon his predecessor’s pro- independence stance.

“China’s Taiwan policy is moving in step with the changing realities of modern-day politics and the broader economic environment,” said Liu Hong, director of the Taiwan Research Institute at the Beijing Union University. “This is a turning point in the history of relations across the strait.”

The Chinese Communist Party in 1978 dropped its pledge of “liberation by force” to repatriate Taiwan, replacing it with a policy of “peaceful reunification.” Since then, about 1 million Taiwanese have moved to China to live and work, investing an estimated $150 billion.

Taiwanese Visiting China

As many as 7 million Taiwan residents may have visited China, trips that 30 years ago were considered treasonous and punishable by life imprisonment.

Leaders of Taiwan’s ruling Kuomintang party and the Chinese Communist Party met in Shanghai on Dec. 20 to foster economic ties. China offered 130 billion yuan ($19 billion) of loans to Taiwan companies operating on the mainland and to buy $2 billion of flat-panel displays from the island’s companies.

“Relations across the Taiwan Strait have advanced in leaps and bounds in the past 30 years,” said Wang Yi, director of the Chinese government’s Taiwan Affairs Office, responsible for relations with the island.

The governments of China and Taiwan, administered separately since the end of a civil war in 1949, are technically still in a state of confrontation. The world’s largest regular army has more than 900 missiles along China’s southeastern coast, aimed at Taiwan, while the Taiwanese military is planning to buy $6.5 billion of U.S. weapons including Lockheed Martin Corp.’s Patriot anti-missile systems.

Formal Truce

Hu, chairman of China’s military commission with direct control over the country’s armed forces, today offered to sign a formal armistice with Taiwan. The two militaries can meet regularly to build mutual trust, and create a mechanism to manage risk and lessen tension across the Taiwan Strait, he said.

“Peaceful development is in the best interest of both China and Taiwan,” Hu said, while reiterating that the mainland will oppose any attempt by Taiwan to seek independence.

The Chinese leader’s address today was attended by members of China’s Politburo, the highest policy-making body of the Communist Party, as well as officers from the country’s army.

Hu today encouraged mainland companies to invest in Taiwan and invite Taiwanese companies to reciprocate.

World Health Assembly

China replaced Taiwan in the United Nations General Assembly in 1971, and has blocked the island’s attempts to join world bodies or participate in global events, claiming that any role would be a de facto recognition of Taiwan’s sovereignty.

Only 23 countries, mostly in the Pacific, Africa and South America, including Paraguay, have formal diplomatic ties with Taiwan.

China is willing to hold talks on Taiwan’s “non-government economic and cultural exchanges” with foreign nations, and is open to “reasonable arrangements” for Taiwan’s participation in international organizations in ways that don’t hurt the “One China” principle, Hu said today.

Taiwan is discussing with China the possibility of the island participating in the World Health Assembly, the Taipei- based Central News Agency said yesterday, citing an interview with Ma.

To contact the reporters on this story: Eugene Tang in Beijing on

China's Hu calls for military exchanges with Taiwan

8 hours ago

BEIJING (AFP) — Chinese President Hu Jintao called Wednesday for military exchanges with Taiwan, in another sign of rapidly improving ties between the former arch enemies.

"The two sides can pick the right time to engage in exchanges on military issues and explore setting up a military and security mechanism to build mutual trust," Hu said.

This would help "improve the situation in the Taiwan Strait and lessen military and security concerns" he said in a speech broadcast live on national television.

The address was to mark the 30th anniversary of a message from China to "compatriots in Taiwan" which called for reunification of the two sides by peaceful means.

China and Taiwan have been governed separately since the end of a civil war in 1949 but Beijing considers the island part of its territory and is determined to get it back, by force if necessary.

Their relationship has been one of the world's most dangerous potential flashpoints, with both sides lining up billions of dollars of military hardware against each other in readiness for a possible war.

China has targeted Taiwan with more than 1,000 short-range ballistic and cruise missiles, according to defence authorities on the island.

But relations have improved dramatically since Ma Ying-jeou, a politician from Taiwan's Beijing-friendly Kuomintang party, assumed the island's presidency in May.

As part of the recent rapprochement, the two sides this month began direct daily flights, postal and shipping services, in a move expected to boost trade ties.

Taiwan's defence ministry gave no immediate reaction to Hu's remarks but the Kuomintang issued a statement welcoming the remarks.

"We have never relaxed in our efforts to seek the expanded space that Taiwan needs for its international activities, establishing a cross-Strait military confidence-building mechanism, and reaching a peaceful agreement," said the statement.

"Today Secretary-General Hu Jintao has responded positively to the above. We are glad to see these commitments, and we further hope that concrete results will be reached in the foreseeable future."

In the speech Hu also urged Taiwan's pro-independence Democratic Progressive Party, the island's main opposition force, to "clearly understand the situation and stop secessionist activities".

"If the party could abandon its 'Taiwan independence' stance, we would make a positive response," he said.

Hu also called for growing economic interaction with Taiwan, a major source of investment, especially along the export-dependent east coast of the mainland.

"We continue to welcome and support Taiwan companies' business in the mainland and encourage mainland enterprises to invest in Taiwan," Hu said.

"We expect to normalise economic relations across the Strait and establish an economic cooperation mechanism."

The DPP rejected Hu's overtures, saying Beijing's position had long been the stumbling block in relations.

In a statement, the party said: "We think the biggest problem dividing Taiwan and China is not what the DPP has been advocating, but is the Taiwanese people's feelings towards China -- Beijing's military threat, its attempts to block Taiwan in the international community and its continued efforts to reduce Taiwan's international status.

"If China sincerity wants to have a dialogue with the DPP, it should not have imposed pre-conditions, nor asked us to alter our stance."