Taiwan NGO shelves free trade zone referendum amid anti-China sentiment

TAIPEI, Nov 23 (Reuters) - A Taiwan NGO that promotes engagement with China has called off its push for a referendum on whether to set up a free trade zone allowing unfettered Chinese investment, its founder said, amid growing anti-China sentiment on an island Beijing considers its own.

Chinese President Xi Jinping this month met his Taiwan counterpart, Ma Ying-jeou, in the first meeting between leaders of the two sides since China’s civil war ended in 1949.

Some observers saw the meetings as a step forward in improving ties, others as a polarisation of positions weeks before Taiwan holds elections in which the pro-China ruling Kuomintang (KMT) is expected to be trounced.

Loh Hong-bing, founder of the NGO called Taiwan Glory, wants to set up the free trade zone on the tiny rural island of Kinmen, or “Golden Gate”, once the front line between the diplomatic foes and just a half-hour ferry ride from China.

“Nothing, absolutely nothing, can get done since the student movement in 2014,” Loh said, referring to the Sunflower Movement protests, led by youths angry at perceived growing economic dominance by China, which sank a proposed trade pact between the two sides.

“We’re giving up on our referendum proposal,” he told Reuters. “... the Kinmen government has set up obstacles to stop it from happening,” he added. The decision to shelve the vote, which was to be held just on Kinmen, was made weeks ago but has not been made public until now.

The local government had delayed holding a meeting of councillors and local heavyweights required to consider the referendum proposal, he said.

“The Kinmen government hasn’t held such a meeting,” he said. “It’s a soft signal saying no to the proposal.”

Kinmen county chief Chen Fu-hai was hopeful the free trade zone would happen eventually but said a referendum was inappropriate given the anti-China feelings.

Taiwan votes in a new president and legislature in January when the ruling KMT is expected to be beaten by the Democratic Progressive Party (DPP), which has traditionally favoured an independent Taiwan.

Beijing and Taipei have been diplomatic and military rivals since 1949, when Chiang Kai-shek’s KMT fled to Taiwan after losing the Chinese civil war to Mao Zedong’s Communists on the mainland.

China has not renounced the use of force to bring Taiwan under its control and steel and concrete anti-landing defences still scar the beaches of Kinmen.

Taiwan Glory, based in Taiwan’s second city of Kaohsiung, belongs to China Glory, a NGO which says its goal is to help the poor, according to two senior officials within Taiwan Glory.

China Glory is in turn controlled by China’s United Front Work Department, an organ of the Communist Party’s Central Committee tasked with unifying China and Taiwan, according to official documents reviewed by Reuters and well-placed sources.

Xi told Ma when they met in Singapore that Beijing would never accept Taiwan’s independence, raising questions about how Beijing will get along with the DPP if it comes to power.

“No force can pull us apart because we are brothers who are still connected by our flesh even if our bones are broken,” he said. “We are a family in which blood is thicker than water.”

Only the people of Taiwan can decide its future, DPP leader and presidential frontrunner Tsai Ing-wen said a day after the Xi-Ma talks. Beijing takes this stance to mean it wants independence.

When asked by Reuters whether China-Taiwan ties would deteriorate if the DPP won the presidential race, an official at the news department of China’s Taiwan Affairs Office said: “This is a theoretical question and we cannot answer it.” (Additional reporting by Ben Blanchard in BEIJING; Editing by Nick Macfie)