Pacts offer businesses better prospects, but financial woes may slow cross-strait trade

Mainland companies doing business with Taiwan expect lower costs and more convenience to flow from agreements the two sides signed this week allowing direct flights, shipping and postal links.

But the full potential unleashed by the deals may not be realised quickly because of the global financial crisis, company officials said.

Some in Taiwan fear the deals are a political ploy by the mainland to bolster its goal of reunification, but mainland companies from Shanghai to Xiamen see only business opportunities for themselves.

'We have looked forward to this day for a long time,' said Yang Guanghua , general manager of Xiamen Airlines.

The mainland first publicly floated the idea of the 'three links' - mail, air and shipping services, and trade - as early as January 1979 - soon after its economic reform and opening up began.

At the time, the National People's Congress issued a letter to the Taiwanese people saying direct links would increase contacts and communication. When the mainland and Taiwan joined the World Trade Organisation in 2001 - Taiwan as a 'separate customs territory' to avoid the contentious issue of sovereignty - some analysts predicted the advent of direct links. But negotiations were ruled out by the fractious relationship between the two sides and by Taiwan's then president, Chen Shui-bian.

Now Xiamen Airlines, based in Fujian province across from Taiwan, will increase its routes and buy new planes to serve them after the mainland and the island agreed to triple the number of weekly charter flights to 108 and fly directly, instead of passing through Hong Kong airspace.