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Cablegate: Matsu Meets the 21st Century: "Mini Three Links"

VZCZCXRO6885
RR RUEHCN RUEHGH RUEHVC
DE RUEHIN #1621/01 2000833
ZNR UUUUU ZZH
R 190833Z JUL 07
FM AIT TAIPEI
TO RUEHC/SECSTATE WASHDC 6061
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCPDOC/USDOC WASHDC

UNCLAS SECTION 01 OF 02 TAIPEI 001621

SIPDIS

SIPDIS

STATE PLEASE PASS USTR
STATE FOR EAP/RSP/TC, EAP/EP
USTR FOR ALTBACH AND STRATFORD
USDOC FOR 3132/USFCS/0I0/EAP/WZARIT
TREASURY FOR OASIA/TTYANG

E.O. 12958: N/A
TAGS: ECON ETRD PREL TW CH
SUBJECT: MATSU MEETS THE 21ST CENTURY: "MINI THREE LINKS"
NOT LIVING UP TO EXPECTATIONS IN FORMER COLD WAR OUTPOST

1.(SBU) Summary: The "mini three links" intended to connect
Taiwan's offshore islands with the PRC through direct travel,
mail and trade links, have thus far had limited effect in
bolstering the slumping economy of the Matsu island chain.
With the downsizing of the military presence on Matsu, the
islands have shifted their focus to tourism as a major source
of income. Although there are still several thousand soldiers
on Matsu, the military's reduced presence has contributed to
the isolated outpost's economic woes. The "mini-links" have
so far failed to generate the large-scale tourism from the
PRC that many had hoped for. Residents of the PRC make up a
small fraction of total visitors to Matsu, and most visitors
come on official business, rather than as tourists. In an
effort to revive its economy and attract more mainland
visitors, Matsu is currently running a campaign to encourage
tourism. End summary.

2. (SBU) Matsu is a collection of 36 small islands off
the coast of mainland China and to the northwest of Taiwan.
Old fishing villages and pristine beaches stand side by side
with military installations, and the pace of life is much
slower than in the bustling metropolises of Taiwan proper. On
the front line during the Cold War conflict, Matsu played an
integral role in the two Taiwan Strait crises of the 1950s,
and Matsu (which at its closest is only 10km away from the
mainland) and the PRC continued to bombard each other with
shells containing propaganda on alternating days up until the
second half of the 1970s. Especially noteworthy are the miles
of underground tunnels hewed into the rock that were used to
store boats and armaments during the Cold War, but many of
which are now open to the public for tourism. The combination
of military facilities, folk culture and beautiful landscapes
make for an attractive tourist destination.

3. (SBU) Based on conversations with military leaders
and the head of Nangan Airport in Matsu during a recent
visit, approximately 80% of the visitors to Matsu come from
Taiwan, which offers 8 scheduled commercial flights a day to
Matsu. Taiwan allows long-time residents of Matsu and
businessmen with special permits to visit the mainland. As a
result, many of the visitors to Matsu are Taiwan business
people who own factories or do business on the mainland.
These business people change their formal residences to Matsu
in order to have easier access to the mainland through the
mini-links, but most use Matsu as a stopping point and do not
contribute much to the local economy. Despite the proximity
of Matsu to the mainland, very few tourists come from the PRC
due to the expense of visiting Matsu and the difficulty of
getting the necessary documents, mainly due to PRC and ROC
restrictions. As a result, Matsu's tourism industry has not
lived up to expectations.

4. (SBU) Matsu has attempted to remedy this situation
through an extensive publicity campaign to promote tourism
and its local fiery liquor "gaoliang" (which residents claim
is just as good as, if not better than, the more well-known
"gaoliang" of Kinmen). Matsu's National Scenic Area
Administration has been working hard since its inception in
1999 to preserve the ecology and folk culture of Matsu and to
promote tourism. The Administration especially promotes
former military establishments and tunnels that are now open
to public, as well as eco-tourism to visit nature preserves
and spot elusive terns, which migrate to the islands in the
summer. Although these campaigns have had some success, Matsu
has a long way to go in order to fulfill its hopes of
becoming a major tourist destination.

5. (SBU) Matsu has been largely unable to capitalize on
its "mini three links" status to bring in tourism, partly
because of the difficulties and expenses for tourists from
the PRC. This does not bode well for the future, because the
possibility of increased links between Taiwan and the
mainland would likely result in PRC tourists bypassing Matsu
completely in order to visit Taiwan proper. Thus, Matsu must
work hard to promote itself as a tourist-friendly location
with a rich history and culture and beautiful landscapes. If
Matsu cannot take advantage of such opportunities now, it may
have greater difficulty doing so in the future.

6. (SBU) Matsu evokes images of the Cold War, and
there are reminders of the military legacy throughout the
islands, which even today remain a front line for any
possible future military conflict with Beijing. However, the
dwindling population of about 10,000 on this 36 island chain

TAIPEI 00001621 002 OF 002


just miles off the PRC coastline is struggling to define a
new strategy of survival, even as many young residents are
moving to "the big island" of Taiwan or crossing over into
China to try their luck at business there. If Matsu is to
prosper, it will need (with central government help) to come
up with new strategies to build on its tourist attractions.
YOUNG

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