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Taiwan Straits’ ex-frontline islands deserve to be turned into duty-free havens

By Jens Kastner (Global Times)

11:00, July 04, 2013

Kinmen and Matsu have been on the receiving end of cross-Straits tensions for much of the 20th century and a few years beyond.

Apart from having had to live on landmine-infested soil until last month when the last landmine and unexploded ordnance was cleared, the islands' residents have been plagued by poor transportation links, shortcomings in public facilities and a glaring lack of business opportunities.

But now as cross-Straits relations are at their best ever, authorities on both sides ought to pay those people something back.

Recently, Li Wo-shi, the "magistrate" of Kinmen county, proposed a good way to do it - turn the former frontline archipelagos into "duty-free islands," targeting shoppers from both sides of the Taiwan Straits.

In the era of tensions, the economies of Kinmen and Matsu relied heavily on the pocket money of tens of thousands of Taiwanese soldiers.

As troop numbers have been on the decrease since Ma Ying-jeou became Taiwan's leader in 2008, the mom-and-pop shops supplying the men and women in uniform sell much less of everything, from cigarettes and soft drinks to shoe polish, phone cards and hammers.

Making things worse, the number of mainland-based taishang (Taiwanese businessmen) transiting via Kinmen has dropped steadily since cross-Straits direct flights began connecting Taiwan's and the mainland's second and even third-tier cities.

While in the case of Kinmen, an influx of tourists from the mainland may have offset these factors - 408,000 of them came in 2012 - Matsu, with its meager 7,202 arrivals from the mainland in the same period, is still stuck in the doldrums.

Xiamen Province, which is close to Kinmen, saw 41.2 million foreign and domestic travelers last year. As it takes only a 30-minute ferry ride from Xiamen to reach Kinmen, the strong promotion of duty-free shopping would almost certainly bring about a huge increase of arrival numbers for Kinmen.

Li, Kinmen county "magistrate," has asked the Taiwan authorities to grant mainland tourists multiple-entry visas for Kinmen, and has also asked the mainland authorities to ease the current Kinmen one-day tour restrictions to two or three days.

Somewhat suggesting that his pleas were heeded, the mainland's Taiwan Affairs Office has since unveiled a total of 31 measures aimed at promoting further exchanges with Taiwan, one of which is the extension of the period residents of Xiamen can stay in Kinmen. Taiwan's tourism bureau was quick to applaud the relaxation.

Things arguably do look a bit more complicated for Matsu, however. As there is no major mainland city in its vicinity, the archipelago will find it significantly more difficult to attract mainlanders as well as Taiwanese for a quick duty-free shopping hop.

The people of Matsu are being lured by the extremely generous promises of a US investor, who wants to turn their home islands into a major gambling hub that targets mainly wealthy mainlanders.

The political decision on whether to legalize gambling on Matsu is still pending in Taipei. But what's crystal clear so far is that a massive casino resort will not only create a windfall but also bring along all sorts of social, administrative, environmental and other downsides.

The authorities in the mainland and Taiwan should assign academics, entrepreneurs and local officials to come together for some serious brainstorming. Those people should figure out how the duty-free idea can be realized so that Matsu residents will get their fair share of the cake.

Perhaps the way to go is not to open the doors wide to the US gambling industry, but to make "duty-free shopping" on Matsu even "duty-freer" with the help of subsidies.

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