TAIWAN HITS ILLEGAL CHINA TRADE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000403640028-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: February 9, 2012
• Sequence Number: 28
• Publication Date: July 11, 1985
• Content Type: OPEN SOURCE

STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/02/09: CIA-RDP90-00965R000403640028-8
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WASHINGTON POST
11 July 1985
Taiwan Hits Illegal China Trade
By Dinah Lee
tipecml to The Washington Post
HONG KONG-Taiwanese
authorities are beginning to
crack down on the flourishing
illegal trade between Taiwan and
the Chinese mainland, most of
which is channelled through
Hong Kong.
An increase in the illegal traffic
led to investigations m ay y
one of the most powerful arms of
Taiwan's military intelligence
network, the Taiwan Garrison
Command, actor i'mi to sources
in Taipei.
Local newspapers in Hong
Kong have reported the deten-
tion of three businessmen by the
command, and the sentencing of
one Taiwanese by a military
court to eight years in prison for
bartering directly with mainland
Chinese.
A Hong Kong woman who
acted as a middleman for Tai-
wanese traders has been denied
an entry visa to Taiwan, accord-
ing to Hong Kong press reports.
These moves mark the. first
extensive investigation into the
trade, which has grown in only
three years to reach last year's
official total of $560 million. Dip-
lomats in Hong Kong and Taipei
say official statistics probably do
not reflect the whole picture, and
that last year's total may be set
more accurately at $600 million
to $700 million.
Hong Kong government sta-
tistics, which do not include Tai-
wan's indirect China trade via
Tokyo or Singapore, register
$540 million worth of goods sold
via Hong Kong between China
and Taiwan in the first four
months of this year alone, an in-
crease of 46 percent over the
same period in 1984. The total
for this year for all China-Taiwan
trade is expected'to reach $1
billion.
The Taiwanese government is
afraid that Taiwanese businesses
will become overly dependent on
mainland orders and increase the
economy's vulnerability to over-
tures by the communists.
Although Taiwan's 10.6 per-
cent economic growth rate put it
at the very top of Asian nations
last year, its export-led economy
has suffered this spring from a
drop in demand from its primary
market, the United States. Econ-
omists in Taipei report that de-
mand by mainland Chinese for
Taiwanese goods is keeping
some Taiwanese manufacturers'
order books full.
Taiwanese authorities also are
concerned about an increase in
direct trade between Taiwan and
the mainland, a trade the com-
munist authorities are openly
encouraging in defiance of Tai-
pei's stringent ban.
Until recently, such trade con-
sisted mostly of casual exchanges
of fish and traditional Chinese
herbs and liquors between fishing
vessels from both coasts plying
the Taiwan Straits.
However, the trade now in-
cludes mainland raw materials
and Taiwanese consumer goods.
One Taiwan newspaper linked
reports that Communist Chinese
authorities were purchasing Tai-
wanese currency notes in Hong
Kong with suspicions that the
Taiwanese-denominated cash
would be used to pay Taiwanese
businessmen and protect them
from detection.
According to Communist Chin-
ese trading agents in Hong Kong,
the mainland province closest to
Taiwan, Fujian, openly desig-
nated nine of the province's port
cities as receiving points for Tai-
wanese goods this spring. Fujian
trading corporations with offices
in Hong Kong say they have re-
ceived official directives from
central authorities to expand di-
rect trade with Taiwan whenever
possible.
Declassified in Part - Sanitized Copy Approved for Release 2012/02/09: CIA-RDP90-00965R000403640028-8