Beijing has made no official announcement about a boycott, but hotels in Kaohsiung reported cancellations from thousands of mainland Chinese tourists, according to Agence France Presse (AFP).
This boycott is a reaction to Tibetan spiritual leader His Holiness the Dalai Lama's visit in late August, combined with the scheduled screening of a controversial documentary about exiled Uighur activist Rebiya Kadeer.
These two events mark the latest stage in Taiwan's struggle to improve ties with China and promote Chinese tourism, while maintaining its own sovereignty and its citizens' freedom of speech.
His Holiness the Dalai Lama, whom Beijing has labeled a separatist, completed a five-day "non-political" tour in southern Taiwan after the region was devastated by Typhoon Marakot in August. Despite the strictly spiritual and humanitarian nature of His Holiness's visit, Chinese officials denounced the event and cancelled several delegations to the island.
"10 Conditions of Love," a film depicting the life of Uighur independence activist Rebiya Kadeer, is scheduled to be the "main event" of the Kaohsiung Film Festival, taking place 16-29 October.
AFP reports that Beijing has labelled Kadeer a "criminal" and accused her of inciting ethnic violence in China's western Xinjiang region in July that led to the deaths of nearly 200 people.
Kaohsiung Mayor Chen Chu explained that the decision to include the controversial documentary was made out of "respect for arts, creativity and freedom of speech."
Koumintang Deputy Secretary General Chang Jung-Kung warned Chen to think carefully about the potential consequences of this screening, urging the mayor to give "top priority" to the "the public interest" of her city, reported the China Post.
However, Chang and other Taiwanese officials maintained that Taiwan protects the right to freedom of speech and will not interfere with the film's screening, despite strong Chinese opposition.
"We (the KMT) can't tell Kaohsiung what it can and cannot screen," stated Chang.
According to the Taipei Times, the Chinese government pressured the Melbourne International Film Festival to exclude the documentary earlier this year. The Times reported that, "When Melbourne refused to cave in to its demands, Beijing withdrew five films from the festival and the festival's web site was hacked and content replaced with a Chinese flag and anti-Kadeer slogans."
Chen claimed that Kaohsiung will work out other measures to "save" its tourism, rather than canceling the screening of "10 Conditions of Love."
Kaohsiung's director of tourism, Lin Ku-Shan, said that Kaohsiung is not the only Taiwanese city facing a decrease in tourism, and that the global financial crisis and damage from Typhoon Marakot are also contributing to the current slump.
Since the election of KMT's Ma Ying-jeong last year, Chinese-Taiwanese relations have generally been improving. China and Taiwan held their first direct dialogue in 10 years in Beijing in June 2008, leading to regular direct flights across the Taiwan Strait and measures to boost tourism.
"We hope the cross-Strait ties will continue moving forward on the track," Ma stated during a Koumintang meeting last Sunday.