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