Taiwan, China make economic history with new pact

TAIPEI, Taiwan – China and Taiwan made economic history Tuesday with a bold agreement that allows planes and ships to travel directly across the Taiwan Strait — the place where many have feared they would fight their next battle.

Still the Asian rivals appear far from resolving the root causes of nearly six decades of hostilities and distrust. The pact was possible because negotiators set aside thorny political disputes and only focused on trade and economics.

The new deal allows passenger flights directly across the 100-mile-wide Taiwan Strait that separates Taiwan from mainland China. In the past, planes had to fly into Hong Kong airspace while traveling between the two sides. Cargo ships, which used to have to stop at the Japanese island of Okinawa northeast of Taiwan, will be allowed to sail directly to the other side and cut hundreds of miles out of each trip.

The deal is significant for businesses and drew applause from three chambers of commerce representing Japan, the U.S. and Europe. The groups said in a joint statement the restrictions on flights and shipping have kept Taiwan from fully participating in the global and Asian economies.

"Taiwan can only benefit from having greater interaction with one of the world's fastest growing markets," it said.

In the eyes of China's leaders, Taiwan is a Chinese province that must eventually unite with the mainland or be invaded by the mainland's massive military.

A conflict could quickly draw in the U.S., which has long warned China's government it may defend Taiwan — a major buyer of American weapons. Even as they talk to China, the Taiwanese have been loading up on more U.S. arms, including Apache helicopters and Patriot missiles.

China-Taiwan relations are so awkward and strained that Chinese envoy Chen Yunlin, who signed the deal Tuesday, has yet to call Taiwanese leader Ma Ying-jeou by his proper title: president. When they meet Thursday, Chen will likely just address him as "Mr. Ma."

Chen — the highest-ranking Chinese official to visit Taiwan — is sticking to Beijing's policy of not formally recognizing the island's government.

Taiwan's top official for China policy, Lai Shin-yuan, urged critics to embrace the deal and stop obsessing about sensitive political issues.

"This is something people should support, instead of making an issue of how I am addressed by the Chinese side," Lai told reporters. "Our sovereignty has not been harmed during the meeting this time."

Most Taiwanese are not ready to unify with China and do not want Beijing meddling in their political affairs. Many favor independence, and China's refusal to recognize their government infuriates them. About 200 protesters scuffled with police Tuesday night outside a hotel where the Chinese envoy attended a banquet.

The Taiwanese president, who took office in May, has promised not to begin unification negotiations during his four-year term.

Some fear that closer ties with China — even if they only involve trade and economics — will sacrifice Taiwan's sovereignty by making it overly dependent on the mainland.

That's the view of Taiwan's previous president, Chen Shui-bian, who was vilified by Beijing because he favored independence. Chen on Tuesday accused the new government of being too friendly with China.

"We have strived to be the masters of Taiwan," he said. "But now we are becoming slaves to China."

But Alexander Huang, a political science professor at Taipei's Tamkang University, doubted the economic agreements will lead to Taiwan being absorbed by its massive neighbor.

"Taiwanese have enjoyed their democracy and don't want to have officials appointed by the mainland," said Huang, who also thought the pact would help decrease the threat of a war.

Huang added the agreement shows China is eager to win the hearts and minds of Taiwanese. Beijing, which refused to talk to Chen's government for eight years, also doesn't want Taiwan to drift further toward permanent independence.

Intel to establish software center in Taiwan

TAIPEI, Taiwan – Intel Corp. announced Thursday it will join the Taiwanese government in setting up a Linux software center in Taiwan to help better market locally produced laptops and mobile Internet devices to the world.

The announcement by Intel Chief Executive Officer Paul Otellini came after two leading Taiwanese computer makers launched "nettops" and "netbooks," cheap and extremely portable laptops with wireless Internet access capabilities.

Both Taiwan-based Acer Inc. and Asustek Computer have adopted Intel's latest Atom chips in their laptops, ranging from $300-$1000. The products allow their customers to choose between the Linux-based and Microsoft's Windows operating systems. Linux is a freely distributed operating system

Otellini told reporters the software development center is being set up as part of Intel's efforts to help Taiwan maintain its competitive edge in the field.

"The center's engineers will provide training and consulting ... to accelerate the adoption of mobile technologies," he said. "These efforts aim to reduce the time to market for shipping Intel Atom processor- and Moblin-based systems."

Moblin is a Linux-based operating system designed to fit nettops and netbooks.

Otellini said Intel Capital, Intel Corp.'s investing arm, intends to invest 386 million New Taiwan dollars ($11.5 million) in Taiwanese WiMAX technology carrier VMAX, making it the 30th WiMAX technology company in the world to get a financial injection from Intel Capital.

WiMAX — short for Worldwide Interoperability for Microwave Access — expands broadband wireless access over longer distances of up to 30 miles (50 kilometers) and reduces the cost of implementing broadband.

Otellini said its collaboration with Taiwan aims to enhance the competitiveness of Taiwan's WiMAX products on the global stage, in line with its endorsement of the WiMAX technology.

Intel's investment will help VMAX to deploy Taiwan's first nationwide WiMAX fourth generation wireless network, Otellini said.

The VMAX service will be available in Taiwan in the first half of 2009, he said.