INDUSTRY EXPECTS PRC TOURISM OPENING IN JULY

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 001260

SIPDIS

SIPDIS

DEPT FOR EAP/TC

E.O. 12958: DECL: 04/07/2016
TAGS: ECON PREL CH TW
SUBJECT: INDUSTRY EXPECTS PRC TOURISM OPENING IN JULY

REF: A. TAIPEI 418


B. TAIPEI 1139

Classified By: AIT Deputy Director David J. Keegan, Reason 1.4 d

Summary
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1. (C) According to Travel Agents Association of Taiwan
(TAAT) Vice Chairman Yao Ta-kuang, there has been little
progress in the last few months on informal discussions
with the PRC over further opening of Taiwan to PRC
tourists. However, the Mainland Affairs Council (MAC) has
agreed to the establishment of a new tourism industry
organization to address PRC objections to TAAT's name. Yao
speculated that there might be a breakthrough on tourism
discussions in July. He noted two outstanding technical
issues. It appears that the Chen administration hopes to
reach an agreement on tourism early this summer and is
taking steps to make that happen. End summary.

Little Progress, Looking Toward July
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2. (C) Travel Agents Association of Taiwan (TAAT) Vice
Chairman Yao Ta-kuang told AIT/T on April 4 that there had
been little progress in the last few months on informal
discussions with the PRC over further opening of Taiwan to
PRC tourists. Yao reported that TAAT members had met with
PRC counterparts during a tourism conference in Harbin
February 15-17 but there had been no meetings since. He
said that TAAT Chairman Tseng Sheng-hai had more recently
requested a meeting with PRC Exchanges Bureau Director
General Dai Xiaofeng, but Dai had been unable to meet due
to his busy schedule. In addition, Yao noted that Chang
Shuo-lao, the chairman of the Taiwan Visitors Association
(TVA),had visited the PRC twice since the Lunar New Year
holiday. Note: TVA is a semi-official tourism industry
organization, which includes other types of tourism-related
firms such as restaurants and hotels in addition to travel
agents. End note.


3. (C) Yao told us that the MAC had agreed to the
establishment of a new tourism industry organization to
address PRC objections to TAAT's name. (Note: TAAT's full
Chinese name uses "the Republic of China" (Zhonghua
minguo). End note.) This new organization would serve as
a counterpart to the PRC's Cross-Strait Travel Promotion
Association and would likely also use the "cross-Strait"
nomenclature. According to Yao, TAAT and MAC are awaiting
more information on CSTPA's structure so that the new
Taiwan counterpart can match it if appropriate. Yao hopes
that they will be able to establish the new organization as
a subsidiary of TAAT and not a new independent
organization, which would take longer.


4. (C) Yao speculated that there might be a breakthrough on
tourism discussions in July. He believes that PRC
officials are under pressure to deliver some kind of
opening because they have publicly committed themselves to
opening up Taiwan to PRC tourists. However, Yao noted that
Kaohsiung and Taipei mayoral elections at the end of the
year will make progress on this kind of cross-Strait issue
difficult

Remaining Issues - Dispute Resolution, Deposit Collection
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5. (C) According to Yao there are two important technical
issues that still need to be resolved. Travel agents in
Taiwan are concerned that if they have a dispute with their
PRC counterparts, there will be no effective mechanism to
seek compensation. TAAT hopes that the two sides will be
able to agree on a system of arbitration committees for
dispute resolution. The two sides must also reach
agreement on collection mechanisms for the deposits that
must be paid to ensure that PRC tourists return to the PRC
and for fines when tourists overstay. Yao said that
China's arrangements with Japan and Australia could serve
as a model for these mechanisms.


TAIPEI 00001260 002 OF 002


Comment - MAC Targeting July
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6. (C) Echoing the comments of Taipei Airline Association
Chairman Tony C.C. Fan, Yao indicated that he gets
instructions on TAAT's contacts with the PRC only from MAC
Economics Division Director Fu Don-cheng. MAC seems to be
maintaining tight control of this process and Fu is the
main action officer. Yao's reference to a July
breakthrough is consistent with MAC Chairman Joseph Wu's
comments to AIT/T on March 30 (ref B). It appears that the
Chen administration hopes to reach an agreement on tourism
with the PRC early in the summer, but it has much lower
expectations for progress later in the year if discussions
must continue. The MAC decision to establish a new tourism
organization to address the PRC's nomenclature objections
suggests a real commitment on the part of Taiwan to making
progress in the near term. End comment.
YOUNG