KAOHSIUNG TRAVEL AGENTS CONTEND CHINA EXERTING CONTROL OVER

UNCLAS SECTION 01 OF 03 TAIPEI 001348

SIPDIS

SENSITIVE

DEPT FOR AIT/W, EAP/TC, INR/EAP

FROM AIT KAOHSIUNG BRANCH OFFICE

E.O. 12958: N/A
TAGS: ECON EFIS PHSA PGOV CH TW
SUBJECT: KAOHSIUNG TRAVEL AGENTS CONTEND CHINA EXERTING CONTROL OVER
CROSS-STRAIT TOURISM

SENSITIVE BUT UNCLASSIFIED, PLEASE PROTECT ACCORDINGLY

REF: Taipei 1244


1. (SBU) Summary: Before the inauguration of weekend direct flights
on July 4, there was a steady flow of Mainland tour groups traveling
to Taiwan via a stop-over in a third-country. However, Kaohsiung
travel agents reported to AIT/K that in negotiations with Mainland
China to establish weekend direct flights, Taiwan authorities
quietly agreed to disallow travel to Taiwan via a third-country for
Mainland tourists and forced all Mainland tour groups to travel via
direct flights. As of July 18, the travel agents contended that
they were not allowed to bring Mainland tour groups via the
third-country route by Taiwan authorities and since July 18,
Mainland tourism in Kaohsiung has all but dried up. They maintained
that China is now able to control which of its citizens can enter
Taiwan and which travel agencies in China and Taiwan are allowed to
participate in cross-Strait tourism. According to them, China has
excluded Kaohsiung travel agencies from participating in
cross-Strait tourism and pressured travel agents to ensure Mainland
tourists spend little time in Kaohsiung, whose Mayor is part of the
pro-independence Democratic Progressive Party (DPP). However, the
Taipei Travel Agents Association Chair told AIT that Mainland
tourist numbers were relatively low island-wide, not just in
Kaohsiung. While the PRC should do more to facilitate Mainland
tourist travel to Taiwan, he explained, Taiwan also needed to market
the island's tourist attractions more effectively. End summary.

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End of Third-Country Flights
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2. (SBU) Before the inauguration of weekend direct flights, tourists
from the Mainland visited Taiwan by transiting through a "third
country" (usually Hong Kong or Macau) on their way to Taiwan.
Kaohsiung travel agents arranged tour packages and tour guides to
take them around Kaohsiung and Taiwan. It was rumored among travel
agents in Kaohsiung that in negotiating the agreement to allow
weekend direct flights, Taiwan agreed to disallow tour groups to
travel to Taiwan via a stop-over in a third country. Taiwan travel
agencies reported to AIT/K that they were told by Taiwan authorities
to stop arranging travel for tour groups via a third-country
stop-over by July 18, which according to them, has effectively
forced all Mainland tour groups to travel via the direct
cross-Strait flights.

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China Controls Who and How Many Visit Taiwan
--------------

3. (SBU) According to the Kaohsiung travel agents, tour groups that
come via cross-Strait direct flights have to show Taiwan immigration
officials a permit issued by their local government back home
allowing them to travel to Taiwan. This gives the Mainland
government the ability to select which of its citizens can travel to
Taiwan. (Note: AIT/K confirmed with Kaohsiung Airport Immigration
officials that permits issued by the Chinese government are required
for entry into Taiwan.)

4. (SBU) While many KMT politicians blame the low number of tourists
traveling to Kaohsiung on its inability to sell itself as a tourist
destination, Kaohsiung travel agents refute that argument by
pointing out that the number of Mainland tourists that came to
Kaohsiung was higher before the era of weekend direct flights.
Kaohsiung travel agents that spoke with AIT/K insisted that the
Chinese government uses its power to deny or delay the issuance of
permits to regulate how many visitors can travel to Taiwan and that
they are purposely keeping the numbers low. They believe the
Chinese government only agreed to the weekend direct flights so
quickly in order to give face to President Ma but still wanted to be
able tightly manage this new development in cross-Strait tourism.

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Selecting Pro-China Travel Agencies in Taiwan
--------------

5. (SBU) China's control over cross-Strait tourism extends well
beyond regulating the numbers of visitors able to travel to Taiwan,
Kaohsiung travel agents asserted. They explained to AIT/K that the
Chinese government has so far only approved 33 Mainland travel
agencies to work with Taiwan travel agencies to arrange trips for
tour groups. Many Taiwan travel agencies have applied with these

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Chinese travel agencies to bring over Mainland tour groups.
However, most applications have been denied. So far, only
applications from 21 Taiwan travel agencies have been approved.
Travel agents in Kaohsiung compiled a list of the 21 travel agencies
that have been selected to participate in hosting Mainland tour
groups. They pointed out that every travel agency selected to
receive tourists by China are based in Taipei. Many of them also
had known close connections to the KMT and Mainland officials. As
of yet, no travel agency outside of Taipei has been approved to
receive cross-Strait tourists, a fact one local travel agent
attributed to the Chinese Government's desire to limit dealings with
businesses from independence-leaning areas.

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Restricting Travel Destinations in Taiwan
--------------

6. (SBU) Kaohsiung travel agents indicated that the Chinese
government's anti-DPP bias extended even into the selection of
destinations Mainland tourists could visit. Other travel agents
that have hosted Mainland tour groups told them that the Mainland
government explicitly instructed the travel agents on which
locations the tour groups could visit, which restaurants they should
frequent, and which hotels they should use. As a result, tour
groups typically spent only a day in the DPP-controlled city of
Kaohsiung and rarely stayed the night, despite the fact that
Southern Taiwan's best hotels are located in Kaohsiung. They
claimed that Mainland tour groups used to spend more time in
Kaohsiung back when they were free of Mainland government
interference.

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Response from Travel Agents in Kaohsiung
--------------

7. (SBU) These seemingly politically motivated restrictions have
proved devastating for travel agencies in Kaohsiung. Many travel
agencies said that they once solely depended on Mainland tourism,
but now have to seek other sources of income while still attempting
to win the approval of the Chinese authorities to participate in
cross-Strait tourism. Few travel agents are publicly complaining
for fear that they would be black-listed by the Chinese government
and would lose any chance of attracting cross-Strait tourists in the
future.

8. (SBU) Some travel agents have begun to file complaints with the
Taiwan Tourism Bureau, but they do so anonymously, faxing the papers
from local 7-11 stores in order to avoid being identified. At the
request of many travel agencies, a letter was sent in mid-July from
Lai She-jen, President of the Across the Taiwan Strait Tourism
Association, to China's Cross-Strait Tourism Exchange Association
President Shao Qiwei. In the letter, Lai questioned China's
apparent restriction of only dealing with travel agencies with
political connections to the Chinese government. A response to the
letter has not been received thus far.

9. (SBU) On August 5, local travel agencies met with a Taiwan
Tourism Bureau official in Kaohsiung to voice their complaints about
the lack of Mainland visitors in Southern Taiwan and the lack of
equal and fair participation for travel agencies outside of Taipei.
Travel agents in attendance told AIT/K that little progress was made
since the Bureau's representative was only a mid-level official.
Ultimately, the group decided to monitor the situation until early
September. If no progress has been made by that time, then they
will go to Taipei to hold a demonstration.

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Rebutting Conspiracy Theory
--------------


10. (SBU) According to Taipei Association of Travel Agents (TATA)
chairman Yao Ta Kuang, however, facilitating increased numbers of
Mainland tourist visits is still a work in progress. In his view,
the number of PRC tourist arrivals in Taiwan will gradually increase
from two or three hundred per day to five hundred per day in the
near future, and it is simply not realistic to expect the upper
limit of 3,000 per day to be achieved immediately. Yao believes
that Taiwan travel agents should increase their promotional efforts
to attract additional Mainland tourists and does not believe that a
perceived a dearth of PRC visitors to Kaohsiung is linked to the
fact that the city's mayor is a DPP member. According to Yao,
Taiwan officials do not have a policy to disapprove Mainland
tourists visiting Taiwan via third areas, including Hong Kong and

TAIPEI 00001348 003 OF 003


Macau, as long as they carry travel documentation accepted by
Taiwan. However, he continued, China has never approved travel by
Mainland tourists to Taiwan via third areas.

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Comment
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11. (SBU) We were surprised to hear that Kaohsiung travel agents
perceived that the Mainland was discriminating against them and
their city. While this perception has not been reported in the
media, it is widely known that the number of Mainland tourists
visiting Taiwan has been disappointingly low (reftel). Local
authorities have called on the government to press the PRC to
facilitate Mainland tourist traffic to Taiwan. At the same time,
they hope that Taiwan will increase spending on tourism promotion to
stay competitive with most other economies in the region, which
devote more resources to tourism. It is not clear how Kaohsiung
Mayor Chen plans to address the paucity of Mainland tourists to her
city. Given low Mainland tourist numbers and only one direct
cross-strait flight operating out of Kaohsiung, she has focused her
tourist promotion efforts on Japan and South Korea. She has been
vocal in criticizing KMT authorities for not channeling more
Mainland tourist traffic to southern Taiwan, a tack which she could
use to bolster a likely re-election bid against a future KMT rival
in 2010.

Castro
Young