Taiwan leaders divided over stance on trade with Beijing

Serious divisions have emerged at the highest political level in Taiwan over the country's policy on trade and investment towards…

Serious divisions have emerged at the highest political level in Taiwan over the country's policy on trade and investment towards its arch enemy, China.

President Chen Shui-bian of Taiwan yesterday expressed support for proposals to ease restrictions on trade and investment with its neighbour, despite criticism of the idea from Vice-President Annette Lu.

Mr Chen said a policy of opening direct transport and commercial links with its rival would be a show of confidence by the island.

"It's a wise choice, a right path we must follow," the President said during a visit to the southern port city of Kaohsiung. "Only when we have confidence can we not be afraid of competition. Like riding a bicycle, we can't limit ourselves to riding in a room. Only when we go outside can we find more opportunities."

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The comments highlighted a lack of internal consensus on one of the most divisive issues facing Taiwan.

A presidential economic advisory council decided on Sunday to recommend developing trade between Taiwan and the mainland and to embrace direct transportation with China, which treats the island as a renegade province.

The entire committee must agree to the proposals at a meeting at the end of August before they can be adopted as official policy suggestions.

Ms Lu, the most outspoken critic of China in the Chen administration, said on Monday the proposals would result in Taiwan "giving everything we have to China." "The next few years will determine our life and death. I hope those who are in charge and in power have greater courage and conscience to face the history," she said.

She has voiced concern over "mainland fever" among Taiwan investors, saying a flow of funds to the mainland will worsen Taiwan's economic troubles and hurt national security.

However, local stock investors and business leaders have welcomed the proposed lifting of Taipei's trade ban.

Beijing has treated Taiwan as a breakaway province since the 1949 civil war and has threatened to attack the island if it declares independence or postpones unification talks indefinitely. Beijing has ignored Mr Chen's government and his DPP party.