By Chen Zhouxi, Wan Xiaoxiao
Published: 2008-05-13

From News, page 7, issue no. 366, May 5, 2008
Translated by Zuo Maohong
Original article: [Chinese]

On April 21, a dream team of investors from mainland China and Hongkong arrived in Taiwan to pursue real estate. It was the first such event the island has experienced in the past 50 years, and came only a month away from the reign of newly-elected president Ma Yingjiu, who had promised to open the island to mainland tourists before July and launch the first weekend charter flights across the strait on July 4.

But as the team eventually found out, the glamor and publicity surrounding their visit would give way to unforseen obstacles.

A Warm Welcome
In the early morning of April 21, SOHO China president Pan Shiyi and his wife Zhang Xin got up and headed for Hongkong, where they met their seven teammates to fly to Taiwan together.

"There were complex procedures. I almost missed the plane," Pan said. When he arrived at the boarding gate dripping with sweat, he recalled, his partners were already being interviewed by two TV stations.

The team touched down at Taiwan's Taoyuan Airport at 3 p.m. Though already prepared for the media, Pan said, he was still startled to find over 30 local media reporting live. The cameras didn't focus on their faces, he said, but scanned them from head to toe; when there was a satchel or a watch, they paused to close-up.

Later that afternoon, the team was received by Taipei's deputy mayor Lin Chongyi. who gave a brief introduction of the city, and mentioned the nine projects it was undertaking, including an airport for cross-strait direct flights. After the two sides were linked by direct flights, Lin added, it would take less than three hours to go to any city in mainland China from the island.

Many important personalities attended that night's banquet. Pan recalled his communication with the Kuomintang's general secretary Wu Dunyi, adding that the latter held his hand during their talk. The most frequently heard phrase that night was, "things will be changed soon", he said.

The organizer of the visit was Liu Changle, board chairman of Phoenix TV and Zhongchengletian Real Estate Company. All in the team were his good friends and had long been interested in investing in Taiwan, he said. As the only one among them who owned a branch company there, he assumed the role of organizing it.

According to Liu, Taiwan's Mainland China Affairs Office (MCAO) had been cooperative in granting entry certificates. Some procedures were unusually efficient, he said.

Cold Suspicions
On April 22 morning, the team met the Taiwanese writer Li Ao, as scheduled. But the outspoken thinker dampened their ambitions to invest there. "Taiwan is in serious political disorder. I'm opposed to their investment here," Li claimed.

More disagreement followed as their trip continued to Taoyuan county, where they were arranged to visit the underground defense works in Cihu Lake, which were operational during the reign of Chiang Kai-shek. On a TV program that night, a local legislator questioned their visit to this newly opened military site without application and queuing, since local regulations limited visitors to 200 every day to protect its delicate ecology. The head of the county's Culture Bureau was thus impelled to clarify that they had applied before hand.

That same day, at a press conference held by four legislators of the Democratic Progressive Party (DPP), the Ma administration was rebuked for pinning its hopes for economic growth on mainland capital.

On the way to Taizhong that noon, Liu told his teammates their visit had sparked reprehension from the DPP. Instead of a "research team", they were referred to as "the real estate group", "the billionaire group" and even "the real estate speculators" in many media reports.

In later visits to Taizhong, Pingdong and Gaoxiong, Liu said they reiterated to their hosts that they were there to create value rather than speculate in real estate, and that their focus wasn't housing, but urban development and tourism there.

In Pingdong and Gaoxiong, DPP mayors canceled their meeting with the team. "But this doesn't mean they ignored us," Liu said, as deputies received them and made recommendations on investments.

Liu said he concluded that north Taiwan was hospitable to their arrival while the south was cold, though such coldness was only a cover of their excitement.

Public Debate
One team member, Vantone board chairman Feng Lun, had conducted research in Taiwan several times prior and was hailed by the team as their Taiwan expert. During this visit, Feng was told there had been more oversea Taiwanese businessmen buying properties in Taiwan recently, and that those previously hesitant also have begun to buy.

"We can see people are full of hope and confidence in the future. This is the biggest difference from the past," Feng said.

According to Professor Zhang Jin'e of Taiwan's National Chengchi University, the media had overreacted to the research team. In his opinion, the local real estate circle had taken advantage of the team to hype up the market, which then touched off public criticism.

This, Zhang said, actually revealed poor communication between the two sides. He suggested the team clarify the situation to mainland Chinese after they returned and advise on Taiwan's economic development.

Previously, rumors had spread that Feng planned to rent an office building of 13,200 square meters in Taipei 101 Tower, the world's tallest building. Feng denied this in his interview with the EO and explained he only inquired about the market of the tower in a meeting four months before.

According to Cai Zongyi, vice president of Taiwan's real estate giant Farglory, there were 400 to 500,000 property purchases in mainland China by Taiwan capital, while only less than five property purchases by mainland Chinese had been permitted in Taiwan.

Though in theory mainland capital had access to property purchases in Taiwan, he said, in practice it would meet various obstacles. For example, he explained, mainland Chinese had to pass a special assessment before entering the island, and a lump-sum payment with his own money would be required. In addition, mainland Chinese could only stay up to one month on the island.

According to a government official in Taiwan, the new chief of the MCAO was an advocate of independence, and that this might exert negative impacts on policies of the mainland. Therefore, it was too early to talk about mainland investment in Taiwan, he said.

Highlights of Interviews with Team Members

The EO: What was the greatest achievement of this visit?

Liu Changle: The general public in Taiwan looks forward to capital inflow from the mainland, but policy obstacles still remain. From a psychological point of view, the opening up of the mainland to Taiwan these years have torn down the walls between ordinary people in the two sides. What impressed me most was four of the group members felt at home in Taiwan though it was their first trip there. This was because all around them were Chinese people with the same skin color

The EO: What's the biggest obstacle facing mainland companies wanting to invest in Taiwan?

Feng Lun: Currently, it's the law. It forbids large-scale investments from the mainland. Transactions in Taiwan can't be settled in yuan, and vice versa. There are also problems of free exit and entry. It's relatively convenient for Taiwanese to enter the mainland, but not for mainland Chinese to go to Taiwan. Only when these three problems are solved will investment be possible.

The EO: What's your expectation of polices after May 20 [when Ma Yingjiu will take office]?

Pan Shiyi: I expect Taiwan to be more open to the mainland. Investment from the mainland may be permitted after that. Given the current Taiwan market, where GDP per capita is already 15,000 dollars and population isn't growing much, the foundation of large-scale development in real estate doesn't exist. The only thing that's increasing is the number of tourists from the mainland, which may be a new business opportunity. Now there're only 80,000 mainland Chinese traveling to Taiwan every year. There will be an attractive market if this number increases to several million.

Tourism is most probably the first opportunity we can see. The second would be for the mainland capital to start companies in Taiwan and bring back technologies and management skills. The first is simple and efficient. There'll be immediate profits as long as people get a plane ticket and travel around the Ali Mountain and the Sun Moon Lake. The second relates to people's mentality. Taiwanese we've contacted all hope to change the current lifeless situation, and the general public's pursuit is a great power pushing Taiwan forward.