From today's Asian Wall Street Journal
The last time this happened, Harry Truman was in the White House and Mao Zedong and Chiang Kai-shek were the leaders of the two Chinas. Regular direct flights between China and Taiwan begin Friday, with a chartered plane carrying tourists to Taipei. The direct links had been in the works for more than a decade and were finally approved in a June 13 agreement.
In Taiwan, the direct flights are the first tangible sign of progress in cross-Strait relations since President Ma Ying-jeou took office in May. He swept to victory by nearly 17 percentage points on pledges to improve cross-Strait ties and fix the economy. Several recent liberalization measures, though modest on their own merits, are encouraging first signs that Mr. Ma is moving in the right direction on both fronts.
Another small step forward in cross-Strait ties is expanded currency convertibility between the yuan and the Taiwan dollar. Mainland visitors to Taiwan will now be able to convert small amounts of yuan to Taiwan dollars, a service approved for the benefit of tourists.
Just as encouraging, Taipei is now starting to adopt a more rational approach to cross-Strait investment. New rules released last week eliminate the requirement that foreign mutual funds prove they don't accept investment from mainland Chinese before investing in Taiwan's market. Taiwan mutual funds will have more scope to invest in the Hong Kong-listed shares of Chinese companies. The net result will be more opportunities for Taiwan investors, and perhaps more investment capital for Taiwan.
Not all of the credit for this progress belongs to Mr. Ma and his Kuomintang Party. His predecessor, Chen Shui-bian of the Democratic Progressive Party, pushed hard for cross-Strait flights, for example, only to encounter resistance from Beijing.
But other steps, like the investment liberalization, have been taken unilaterally. Now Mr. Ma's challenge will be to move the ball further forward. To name but one, he could lift the ban on Taiwan companies investing more than 40% of their net worth in China.
Mr. Ma has displayed his famous pragmatism with the latest reforms. Now what Taiwan needs is more of the same.
