Bilateral Air Service Agreements within the Greater China Area: Implications for Future Cross-Strait Air Transportation Services

Abstract

Direct flights across the Taiwan Strait have been the hottest issue in cross-Strait relations since the 1980s. Although Taiwan’s policy toward direct flights is not yet clear many believe that the entry of both sides into the World Trade Organization (WTO) will speed up the flight schedule process. There are, however some technical problems to be solved before the airlines of either side can operate nonstop flights across the Strait. One critical issue regards the striking of a bilateral agreement between China and Taiwan. If both sides agree to negotiate such an official document, serious political and economic conflicts would likely occur as soon as negotiations are begun.\nThis paper discusses the history of air transportation services among Macau, Hong Kong, Taiwan, and China. Past and new agreements are examined, their impacts and possible influences on the regional markets are analyzed, and both the business and political considerations related to these agreements are explored. Given the experiences of both past and existing agreements, the format as well as the content of any cross-Strait bilateral agreement would need to be carefully constructed in order to be acceptable to both sides. The possibility of a multilateral agreement within these states and zones, and the resulting impacts on this area will also be examined.