Gravelly Voices

Gravel, of critical importance to the local political economy, has appeared again in conjunction with other ugly trends. First, the background: Taiwan Journal summarized the clout China has in the local political economy two Novembers ago:

The [2006] ban on gravel exports has produced economic ripples on both sides of the strait. Immediately after imports stopped, the price of gravel in Taiwan initially skyrocketed from US$13.8 to US$30.8 per cubic meter, and no longer having access to Taiwan's lucrative market means that gravel exporters in China's Fujian Province have been hit hard as well. High prices and the suspension in trade left Taiwan with a shortfall of 25 million cubic meters of sandstone this year. As a consequence, overall economic development has naturally slowed and many large-scale public construction projects have been forced to halt due to the lack of materials.

This reliance on imports of gravel means that China plays a huge if quiet role in the local political economy, which runs on gravel used to fuel the cement that is the lifeblood of the construction-industrial state. Without China, the article notes, it will be difficult to grow the construction-industrial economy -- its importance is signified by the fact that the first two wharves at the new Taipei Port were gravel wharves (completed in 1998).

Given all this, anything that impacts that flow of gravel from China has a profound effect on Taiwan's construction industry and the island's local political economy. The CNA reports via the Taipei Times:

The Mainland Affairs Council (MAC) said yesterday that negotiations on gravel shipping operations across the Taiwan Strait could begin at any time if Chinese regulations on Taiwanese shipping operators do not comply with the spirit of the direct sea transportation agreement signed with Beijing last month.

MAC Deputy Minister Chao Chien-min (趙建民) said that the administration would find out whether China’s requirements failed to comply with the spirit of equal participation, and if that were the case, it would be “properly dealt with.”

This declaration came on the heels of a quiet but urgent flap. From the same report:

Chao made the remarks in response to questions about a complaint filed by local gravel shipping operators, who have accused the government of neglecting them during negotiations for direct sea transportations links across the Taiwan Strait.

They criticized the transportation ministry for overlooking their financial plight and asking them to buy new ships. They also complained that China’s requirement that flag-of-convenience ships be less than 33 years old was too strict.

They threatened to use their ships to stage a protest at Taipei Port on Thursday if they did not receive a positive response from the government. Thursday marks the day when Chinese permits issued to five Taiwanese ships are set to expire.

Lee Li-jane (李麗珍), director of the council’s Department of Economic Affairs, said that five Taiwanese ships were allowed to transport gravel across the Taiwan Strait before the agreement was signed and they must apply for new permits from both Taiwan and China before Thursday. However, the department’s understanding was that China had not yet received any application from the firms, Lee said.

As for those who could not obtain a permit before the agreement was signed, Lee said they could continue to ship gravel from China, but they must go through a third country before coming to Taiwan, or they could apply on-line for a single shipment trip. The transportation ministry said it would help them resolve any problems, although the ministry’s position was to encourage them to buy new ships.

Lee said most of those who did not obtain a permit were rejected because their ships were too old. Those operators have asked the Taiwanese government to issue them permits so they would be allowed to ship gravel from China, but Lee said the department’s evaluation was that it would put Taiwan in a less favorable position because China might ask Taiwan to reciprocate for its old ships. Therefore, the proposal was not put on the negotiation table, she said.

The reason that the ships were able to ship gravel before the agreement was signed was because they took advantage of China’s lax implementation of its laws, Lee said.

“Now that the agreement has been signed, that door is closed,” she said.

Regarding the complaint that 10 Chinese ships that Beijing has approved were over the age limit, Lee said the oldest among them was built in 1975 and that ship would not be able to renew its permit next year. Statistics show that Taiwan imports 95 percent of its gravel from China, or 15 million tonnes to 30 million tonnes a year.

The "95%" figure seems a bit off; it probably means 95% of imports. Other reports say China fills about 1/3 of Taiwan's gravel needs. Taiwan News gave the shippers' side of the story:

A sandstone imported surnamed Cheng said that as Taichung Mayor Jason Hu (胡志強) launched the Da Bang Ship, a flag-of-convenience ship carrying sandstone, at Taichung harbor on Dec. 15, marking the commencement of cross-strait shipping links, Da Bang Ship was denied entry of Huangpu port in southern China on its second voyage even though it has “direct shipping permit” issued by Taichung Harbor Bureau. With several failed attempts for negotiation, the ship could only stop at Hong Kong followed by its return to Taichung.

Da Bang Ship has received a “urgent notice” from China, demanding that the ship owners apply to China for “cross-strait waterway transportation permit” and “cross-strait ship operation license” and can only enter Chinese ports with the above two licenses starting next year, said the Taiwan Sandstone Import Association.

The Association said that they had asked many departments for help, including the Office of the President, the Mainland Affairs Council, and the Straits Exchange Foundation (SEF), but in vain. The Association decides to hold a press conference today and gather twenty ships at the Taipei harbor this week for protest.

Cheng said that Taiwan imported over 30 million tons of sandstone from China every year, 75% by Taiwanese owners and 25% by Chinese owners. However, after the signing of cross-strait agreements, China had unilaterally announced that only ten Chinese cargo ships could do business and twenty ships on Taiwan’s side are banned from entry into China.

It's a similar pattern: we have direct flights, but China will only send its tourists on Chinese aircraft. Other potential participants in cross-strait relations are excluded, and China uses the new agreements to take over trade once controlled by Taiwan. You can see why China wanted the DPP out: the DPP would never have given away the island like this. Another aspect of the pattern is, of course, KMT government officials defending such Chinese behavior while condemning their own people.

Taiwan News report in its entirety (wait until blog loads COMPLETELY!) Taiwan News report:
Twenty flag-of-convenience ships owned by a Taiwan company are banned to enter Chinese ports beginning next January 1, according to Chinese-language newspaper Liberty Times.

A sandstone imported surnamed Cheng said that as Taichung Mayor Jason Hu (胡志強) launched the Da Bang Ship, a flag-of-convenience ship carrying sandstone, at Taichung harbor on Dec. 15, marking the commencement of cross-strait shipping links, Da Bang Ship was denied entry of Huangpu port in southern China on its second voyage even though it has “direct shipping permit” issued by Taichung Harbor Bureau. With several failed attempts for negotiation, the ship could only stop at Hong Kong followed by its return to Taichung.

Da Bang Ship has received a “urgent notice” from China, demanding that the ship owners apply to China for “cross-strait waterway transportation permit” and “cross-strait ship operation license” and can only enter Chinese ports with the above two licenses starting next year, said the Taiwan Sandstone Import Association.

The Association said that they had asked many departments for help, including the Office of the President, the Mainland Affairs Council, and the Straits Exchange Foundation (SEF), but in vain. The Association decides to hold a press conference today and gather twenty ships at the Taipei harbor this week for protest.

Cheng said that Taiwan imported over 30 million tons of sandstone from China every year, 75% by Taiwanese owners and 25% by Chinese owners. However, after the signing of cross-strait agreements, China had unilaterally announced that only ten Chinese cargo ships could do business and twenty ships on Taiwan’s side are banned from entry into China.

Cheng protested that China asked Taiwan owners to apply for two licenses but rejected the issuance during their application.

Cheng also slammed the government and related cross-strait departments for not helping the nationals to resolve the problem.

MAC Chairwoman Lai Hsing-yuan (賴幸媛) did not make any comment on the news today, merely saying that it was a biased report.

Taichung Mayor Jason Hu said today that as far as he knows, only a few ships obtained licenses required by China, posing a trouble for Taiwanese owners. The matter should be discussed by the SEF with China on the possibility to relax the restriction.

According to the SEF, President Chiang Pin-kun (江丙坤) would begin talks with China on the matter as soon as documents were submitted by the Mainland Affairs Council.


REFS: Empire of Bacon, Gravel and Taiwan.

[Taiwan]