General Secretary of the CPC Central Committee Xi Jinping (right) meets with KMT Chairman Eric Chu in Beijing on May 4 (CNS)

On May 4, Kuomintang (KMT) Chairman Eric Chu met with General Secretary of the Communist Party of China (CPC) Central Committee Xi Jinping at the Great Hall of the People in Beijing, making Chu another sitting KMT chairman to set foot on the mainland since 1949, when the KMT fled in exile to China's eastern isle of Taiwan after their defeat at the hands of the CPC-led forces.

Both sides of the Taiwan Straits should build a community of shared destiny and settle political differences through consultation as equals, commented Xi in a speech he made during his meeting with Chu.

Observers believe the high-level meeting between the leaders will help strengthen cross-Straits ties ahead of the island's leadership elections next year, as well as consolidate the importance of the one-China policy in the midst of a changing political landscape in Taiwan.

At the meeting, Xi, also President of China, said that cross-Straits relations have entered a critical phase, and that both the CPC and the KMT should work together to shape the future of cross-Straits development.

Xi did not exclude the possibility of cooperation with other political parties on the island, while warning that any acts aimed at "Taiwan independence" would hurt cross-Straits ties and harm all Chinese people.

"We have upheld the 1992 Consensus as the foundation on exchanges with the authorities and various political parties in Taiwan," Xi said.

The 1992 Consensus was the outcome of a meeting in Hong Kong in November that year between the mainland-based Association for Relations Across the Taiwan Straits and the Taiwan-based Straits Exchange Foundation. It is an agreement of acknowledgment by both sides that the Chinese mainland and Taiwan belong to one and the same China. It has served as the framework and foundation for cross-Straits interaction ever since.

Xi called for both the mainland and Taiwan to be on high alert against statements such as "one country on each side" and "one China, one Taiwan," which will bring neither peace nor development.

Chu reiterated Xi's reference to building a community of shared destiny, and said that the 1992 Consensus has served as an important foundation of cooperation across the Straits.

Chu also said Taiwan should be able to play a vital role in regional economic efforts like the Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative, as well as the Regional Comprehensive Economic Partnership, an ASEAN-led trade agreement linking the economies of 16 Asia-Pacific countries and regions.

"Voices have emerged in Taiwan that hold a distorted view of cross-Straits relations following the outbreak of the 'Sunflower Movement' last year [a protest staged against the Cross-Straits Economic Cooperation Framework Agreement, a preferential trade agreement that aims to reduce tariffs and commercial barriers between the two sides]. The Democratic Progressive Party (DPP) has also influenced the Taiwanese public with its confrontational view toward the 1992 Consensus," said Li He, Vice Director of the Beijing-based National Society of Taiwan Studies.

The 1992 Consensus was inscribed into the KMT party goals in 2005, after then KMT Chairman Lien Chan made the first ever trip to the Chinese mainland by a KMT chief since 1949.

Observers hold that despite some in Taiwan proposing to revise or even to revert the consensus, it will continue to serve as the fundamental principle of cross-Straits interaction and will not change over time.

"Chu's commitment to the consensus is a positive sign. It is important for the KMT to adhere to this bottom line in a time when some among Taiwan's public have become more distant from the mainland," said Hu Benliang, an associate research fellow at the Institute of Taiwan Studies of the Chinese Academy of Social Sciences (CASS).

Li believes that with Taiwan's next leadership election approaching in early 2016, stable cross-Straits relations are an essential aspect that the next Taiwan leader needs to maintain, and that Taiwan should continue to uphold the 1992 Consensus regardless of who will take the leadership position.

KMT Chairman Eric Chu pays a visit to the Dr. Sun Yat-sen Memorial Hall in Beijing on May 4. Sun is the founding father of the KMT (XINHUA)

A historic meeting

Chu has visited the mainland twice before, though not as KMT chairman. In 1998, he visited Peking University as a visiting professor for the university's centenary. In 2009, as KMT's vice chairman, he attended the First Cross-Straits Forum in Xiamen, southeast China's Fujian Province.

On January 19, the 53-year-old Chu, Mayor of Taiwan's New Taipei City, assumed office as KMT's chairman. His predecessor Ma Ying-jeou had resigned after the KMT's massive defeat in the biggest-ever local elections in November 2014.

Xi, sent a congratulatory message to Chu as the general secretary of the CPC Central Committee in January, expressing his wish to further strengthen communication and deepen mutual trust between the CPC and the KMT.

In his reply to Xi's message, Chu expressed gratitude, saying that the two parties had interacted well and consolidated mutual trust on the basis of the 1992 Consensus during the KMT's past six years in office.

Chu said he expected the two parties will continue to expand their exchanges, strive for mutual benefit and promote ever-lasting peace and prosperity across the Taiwan Straits.

In March, Chu reiterated in a forum in Hong Kong that the KMT's position on the 1992 Consensus was consistent and that the KMT will continue exchanges with the CPC.

Experts believe Chu will follow Ma's policy on developing cross-Straits relations.

Zhu Songling, a Taiwan affairs professor with Beijing Union University, said Chu's words after assuming office demonstrated his recognition of the peaceful development of cross-Straits ties.

From his past statements, it can also be perceived that upholding the 1992 Consensus, opposing "Taiwan independence" and advocating strengthened cross-Straits exchanges and win-win cooperation are Chu's basic viewpoints on mainland-Taiwan issues, said Zhu.

In 2009, when attending the First Cross-Straits Forum in Xiamen, Chu said that people on both sides would never wish to be isolated because of misunderstanding, conflicts or ideological differences and he hoped the two could shelve past disputes and cooperate for development.

The KMT's mainland policies have helped gain support since the party resumed rule over the island in 2008 and the peaceful situation has resulted in obvious benefits for the two, Zhu pointed out.

Cheng You-ping, Director of the Political and Economic Research Center of Taiwan's "National" Taipei University, also believes unchanged policies that contribute to the peaceful development of cross-Straits relations would be the "only choice" for the KMT to turn the table in future elections.

"Chu must let the Taiwan people believe that his party's active role in dealing with issues on cross-Straits relations will bring more benefits to them," Cheng said.

Experts agree the May 4 meeting between Xi and Zhu showcased the two parties' commitments to peaceful development across the Straits.

"The landmark meeting will surely go down in the history of the development of cross-Straits ties. Chu's visit to Beijing means he not only agrees to continue promoting the progress that the two parties have made over the years, but he is also willing to expand cross-Straits exchanges," said Chen Xiancai, a Taiwan studies scholar at Xiamen University.

Chen also said the meeting will have symbolic significance because the KMT is increasingly losing support to the DPP.

"Chu's adherence to the peaceful development may help his party gain more support in the upcoming elections," Zhu said.

Over the last seven years, the KMT has taken advantage of the business opportunities offered by the mainland, in a bid to boost the local economy. "Given the various difficulties that the island has to deal with, Chu should be able to reacquire public support especially from small business owners by promoting things like joining the AIIB and the mainland's new free trade zones," Zhu said.

The mainland has welcomed Taiwan joining in the Beijing-initiated AIIB under a proper name, as well as cooperation with the newly approved free trade zones in the mainland's Guangdong and Fujian provinces, which are geographically close to Taiwan.

At the meeting, Xi also vowed that greater efforts will be made to open up to compatriots from Taiwan. He said the mainland is willing to take the lead in sharing development opportunities with Taiwan.

He called for efforts to create more opportunities for small business owners, farmers, fishermen and young people who want to start their own career. "We will continue to protect the legitimate interests and rights of Taiwan businesses on the mainland and create better environment for their development," he said.

"This formal response relieves worries among Taiwanese compatriots who had thought the era of Taiwan benefiting from the mainland is over," said Ni Yongjie, Vice Director of the Shanghai Institute of Taiwan Studies.

Xi also proposed the two sides improve their people-to-people engagements and strengthen the nation's identity regarding Chinese culture and tradition.

More efforts should be made to ease exchanges between common people, especially for young people to know each other, work with each other and become good friends, he added.

Chu said he hopes the two political parties will deepen cooperation in more areas including safeguarding regional peace, environmental protection and the economy, and provide more opportunities for small and medium-sized enterprises (SMEs) and young people.

"Xi has delivered a message that the Chinese mainland's basic policies toward Taiwan will not change, and the two parties are looking for a better deal to improve the livelihoods of people across the Straits," said Zhang Guanhua, Vice Director of the CASS' Institute of Taiwan Studies.

Xi said he is confident that the Chinese nation will realize its revival in the near future if all Chinese, including people on both sides of the Straits, work together.

"We hope that the CPC and the KMT can share the sacred responsibility to realize the revival of the Chinese nation, improve people's welfare and safeguard peace across the Straits," Xi said.

On deeper cooperation

As part of his visit to the mainland, Chu attended the 10th Cross-Straits Economic, Trade and Culture Forum in Shanghai on May 3.

The forum, co-presided over by Zhang Zhijun, head of the Taiwan Work Office of the CPC Central Committee, and Huang Ming-hui, Vice Chairman of the KMT, was attended by more than 300 people including representatives of the two parties and some other political parties and groups, as well as businesspersons, scholars and young people from across the Straits.

During the forum, all participants agreed that the two sides should strengthen communication and promote understanding to pave the way for further cooperation.

Yu Zhengsheng, member of the Standing Committee of the Political Bureau of the CPC Central Committee, said the forum was a great platform to promote further cooperation now that cross-Straits interaction has deepened.

When addressing the opening ceremony of the forum, Chu pledged that the KMT will be responsible for the public, the next generation and history. He called for continued efforts to improve cross-Strait relations and in sharing the fruits with more people.

Among the topics aired at the forum was Taiwan's participation in the AIIB.

"The Chinese mainland and Taiwan should discuss ways for the island to participate in the AIIB," Yu said at the opening ceremony of the one-day event. "Such moves can improve the competitiveness of the whole Chinese economy."

Chu also expressed the hope that the island could play an active role in the AIIB and other initiatives to expand its status in the international market.

"The 21st century marks an era of cooperation, not confrontation," Chu said. "We should develop a positive attitude toward cooperation while listening to different voices. Taiwan is strong in innovation as well as research and development. It can complement the mainland's strength in manufacturing. We hope to integrate further into the regional economy."

Jiann-Chyuan Wang, Vice President of the Taipei-based Chuang-Hua Institution for Economic Research, said Taiwan should continue to apply for AIIB membership, which could bring huge benefits, though he regretted the island had missed the chance to be a founding member.

Also discussed were Taiwan's participation in the Belt and Road Initiative, other regional economic cooperation, how to involve smaller companies and young people in cross-Straits cooperation and how to better share the wealth created by it.

Proposed by Xi and involving more than 50 countries, the Belt and Road Initiative is a vision of international cooperation running from East Asia to the heart of Europe.

"Contact and exchange between young people from both sides will help them realize their dreams," Yu said, calling for a better deal for young people living, studying, working or starting businesses away from their hometowns on the other side of the Taiwan Straits, regardless of where they originate.

The forum, which was launched in 2005, has been held in a number of cities on the mainland, including Shanghai, Beijing and Guangzhou, and has witnessed many achievements with the development of the relationship, with 153 agreements signed over the past 10 years—most of which have been turned into practical policies.

Chairman of Taiwan's New Party Yok Mu-ming, commented, "We should be responsible for the public, the next generation and history."

By recognizing this trend and people's needs, efforts should be made with courage and insight, Yok added.

Chang Pao-cheng, President of the China Productivity Center in Taiwan, said that SMEs from the mainland and Taiwan have encountered similar problems in their development.

"These include limited capital, a shortage of talent, insufficient research and development capability, and lack of experience in exploring overseas markets and brand building," he said.

Chang suggested setting up a platform for collaboration to help SMEs engage in mutually beneficial cooperation.

Wang Hao, an official at the China Center for Promotion of SMEs Development under the Ministry of Industry and Information Technology, echoed Chang's view on the challenges SMEs face in tapping international markets.

Wang said the authorities are looking to build more collaborative parks in areas where Taiwan entrepreneurs are located and to help SMEs with technological innovation.

As of the end of March, 215 Taiwan-funded new enterprises had been set up since the China (Shanghai) Pilot Free Trade Zone was founded in September 2013, according to Zhu Min, deputy head of the zone's administration.

Zhu suggested that Taiwan enterprises take advantage of the special zone's favorable policies and advised them to invest in service industries such as financing, trade, medical care and training.

With Taiwan entrepreneurs' investment in the mainland reaching $61.6 billion by the end of March, cross-Straits trade has grown rapidly over the past decade.

Figures provided by the State Council's Taiwan Affairs Office showed that trade value between the two sides in 2014 reached $198.31 billion, up 0.6 percent year on year, with imports from Taiwan worth more than $152 billion. In 2012, the cross-Straits trade value stood at $168.96 billion.

Simultaneously, unemployment in Taiwan dropped steadily to 3.96 percent in 2014, a seven-year low.

"These encouraging numbers indicate that improved communication between the mainland and Taiwan has been fruitful, bringing benefits to both sides of the Straits," said Hu with the CASS' Institute of Taiwan Studies.

Interactions Between the Mainland and Taiwan

2015 Xi meets with KMT Chairman Eric Chu in Beijing. Both leaders reiterate their commitments to the 1992 Consensus and vow to build a community of shared destiny;

2013 Xi Jinping, General Secretary of the CPC Central Committee, meets with visiting KMT Honorary Chairman Lien Chan;

2008-09 Then General Secretary of the CPC Central Committee Hu meets with then KMT Chairman Wu Poh-hsiung three times in less than one year. In June of 2009, the mainland and Taiwan resume their systematic consultation, with some 18 agreements or consensuses concluded, including the Cross-Straits Economic Cooperation Framework Agreement;

2008 Then KMT Chairman Ma Ying-jeou wins the island's leadership election and since then, communications between the two sides have picked up remarkably. The same year, direct air transport, sea transport and postal services are launched;

2005 Hu Jintao, then General Secretary of the CPC Central Committee, meets with then KMT Chairman Lien Chan in Beijing. A communiqué describes the two parties' "shared vision for the peaceful development of cross-Strait relations." The same year, the Cross-Straits Economic, Trade and Culture Forum is established as a key communication platform between the mainland and Taiwan;

1992 The 1992 Consensus is reached, with both sides of the Taiwan Straits acknowledging the mainland and Taiwan belong to one and the same China. Since then, the consensus has served as the framework and foundation for cross-Straits interaction;

1987 Business and personnel exchanges resume between the mainland and Taiwan;

1949 The KMT forces led by Chiang Kai-shek flee to Taiwan after being defeated by the CPC.

(Compiled by Beijing Review)

Copyedited by Kieran Pringle

Comments to yinpumin@bjreview.com