For enterprising Taiwanese, Shanghai is hot

Islanders are drawn to a bustling, skyscraper-filled city of commerce on the mainland.

Political relations between China and Taiwan have always been uneasy. The largest US arms deal to Taiwan in a decade and a Bush White House tilt toward the island add tension.

Despite this, Shanghai, China's business capital and most cosmopolitan city, is quietly drawing significant new numbers of Taiwanese to settle and do business, something that delights mainland China and worries Taiwan's officials.

Shanghai - with its cheap labor, tradition of liberal business and international atmosphere, and stunning new skyline - is becoming a mecca for many from across the strait. That adds to grassroots social and economic ties between the two sides, experts say.

While no exact figures exist, Taiwanese say their presence in Shanghai has grown from tens of thousands in the early 1990s to as many as 250,000 today.

With Taiwan's cooling markets and a saturated employment future, some Taiwanese come for a "second chance" at entrepreneurship. Others arrive as executives, factory owners, or students. Once called "the Paris of the East," Shanghai's cachet in the youthful circles of democratic Taiwan seems to be as a place to find friends who speak the same language, like similar music and Web sites, and who care more about business than politics.

"We are Chinese," says a fourth-year business student at Taipei's Normal University, pointing out the ethnic ties between the peoples of both China and Taiwan. "China is becoming the leader in Asia, and Shanghai is the friendliest environment. That's where I'm going."

"Shanghai, Shanghai, Shanghai - that's all I hear about these days," says an officer at the American Chamber of Commerce in Taipei.

Politically, China has softened its approach to Taiwan in the past year, experts in both Beijing and Taipei agree. In the view of Beijing's leaders, China's new markets, its rise in Asia, and its open encouragement of cultural ties with Taiwan will eventually result in absorption of the island - the refuge of Chiang Kai-shek's Nationalist Kuomintang government in 1949. While unification with Taiwan is still one of the prime goals of Beijing's foreign policy, five years of bristling military rhetoric by China seemed only to result in the March 2000 election of Taiwan's President Chen Shui-bian, who's party advocates independence. He visited the US unofficially last month, and Mr. Chen's predecessor, former President Lee Teng-hui, will visit the US this week, yet another irritant to US-China relations.

"You have a soft approach, which is cultural ties, the increasing lure of business, and appeals to ethnic solidarity. And you have a hard approach, which is the military build up," says Chong-Pin Lin, a senior spokesman for President Chen in Taipei. "In the past year, China has slowed on the hard approach in cross-strait relations. They are using the 'soft' offensive."

Shanghai is also seen as offering a "good life" for Taiwanese. Some suggest that "making it" here is as tough as any competitive metropolis. "I was in Taipei last month," says a textile executive in a restaurant on Shanghai's Xiar Xin Road, a budding "little Taiwan" of Taiwanese snacks, Taipei newspapers, and gossip. "You had military exercises, confusion in the government, a lot of infighting, and I felt no vision for the future.... Here, there is 8 percent growth, and everyone's focusing on economics. No one talks about labor laws."

The businessman relaxes with two other Taiwanese friends who own textile factories. One lives in Jakarta, Indonesia, the other in Singapore. "You can see," the exec says, waving to his smiling friends, "It's a Chinese thing. We like to travel, to migrate. We know what's up. In Shanghai, you just feel the business is here."

In fact, Taiwanese are moving to Shanghai even from other parts of mainland China. The city, for them, has a reputation for relatively developed rules of business and some adherence to contracts. Shanghai rules, they say, unlike many parts of China, allow enforcement of antibribery laws. Chinese President Jiang Zemin's son, Jiang Mianheng, in fact, is an executive in several Shanghai firms, and has recently joined with Taiwanese investors to develop one of two new semiconductor foundries near the city.

One food production manager from Taiwan, who requested anonymity, says he came to China in 1994 and opened a pudding factory in Shandong, north of Shanghai. When he began to make a profit, he was "harassed" by corrupt Chinese officials demanding bribes. He quit and moved to Shanghai. "No one bothers me here," he says.

"In Shanghai, the regulations are the best," says Cindy Kuan, who came here six months ago from Taipei as a manager of accounting firm Deloitte Touche Tohmatsu. "Companies that invest a lot find that Shanghai pays attention to them. Would I live anywhere else in China? No!"

Yet some Taiwanese in Shanghai are beginning to doubt the romantic notions of living in this city. They do not think Shanghai is a latter-day Asian "Left Bank" of Paris. Very few Taiwanese have felt any antipathy from local city-dwellers here. But the business life is often much more difficult and clients are less willing to spend money than they first thought.

A restaurant owner says his wealthy Taiwanese patrons "are mostly dependent on their parents" back in Taiwan. "I don't know them very well anyway, I work in the restaurant 16 hours a day and don't get out much."

"There is a wave of thinking that Shanghai is the starry sky," says Iwa Hu, a credit manager at First Sino Bank. Ms. Hu says that unless one is hired by a Taiwanese firm or has a special skill, it is difficult to crack the Shanghai job market.

Among "native Taiwanese" as well as Taiwanese descended from the Nationalist exiles of 1949, some support an eventual unification of Taiwan and China; others do not. All say they rarely talk politics with Chinese colleagues.

"Both sides are changing so fast, that there is no point in trying to figure out the political issue," says a Taiwan expat here.

One Taiwanese executive says his son is looking forward to returning to China and taking over what is now the family business in Shanghai. "He will be back in two years," says the executive. "But first he must do his military service" in Taiwan.

(c) Copyright 2001. The Christian Science Monitor

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