Taiwanese Just Adore the Enemy

Jimmy Li was an ordinary Taiwanese cop. He never expected to find a new career in mainland China, much less settle down there with his wife, two kids and his mother-in-law.

But a nine-room apartment, a live-in maid, a chauffeur, great food, sports and shopping in a culturally familiar setting at a fraction of the cost at home made the decision a no-brainer.

Forget about missile shields and submarines. Forget that the governments in Beijing and Taipei are among the world’s most implacable foes. The Taiwanese are in love with China, and particularly crazy about Shanghai. Fifty-two years ago, mainlanders packed ships and fled as China fell under Communist control. Today, they are packing up their households and heading back.

An estimated 800,000 of Taiwan’s 22 million people now live full or part time on the mainland. As many as 300,000 of them are in Shanghai, China’s new city of dreams. More are on the way, lured by headlines and bestsellers touting Shanghai as a 21st century metropolis they can’t afford to miss.

Only five years ago, China fired missiles in Taiwan’s direction as a warning not to declare independence. Only a few months ago, China reacted angrily to the Bush administration’s decision to sell destroyers, submarines and other weaponry to Taiwan. Although U.S.-Chinese relations appear to have improved after a visit to Beijing last weekend by Secretary of State Colin L. Powell, there has been no warming of ties across the Taiwan Strait.

But business is business. And even though there is no commonly accepted measure of overall Taiwanese investment on the mainland, all estimates agree that it has been substantial--somewhere between $40 billion and $100 billion. This investment has helped fuel China’s economic transformation and created an estimated 3 million jobs.

Unlike the previous generation of businessmen who came only to set up moneymaking production lines, people such as Li are now remaining and even bringing their families. They are betting that despite the political tension, the personal wealth they have helped create for China’s Communist authorities makes it unlikely they will be used as political pawns.

“Eight or nine years ago, it was definitely a concern,” said Yang Ta-cheng, past president of the Taiwan business association in Shanghai. “Now it is almost a nonissue.”

The growing Taiwanese presence changes every political calculation--even for the most ardent Cold Warrior. The presence of Taiwanese on the mainland gives Beijing a way to apply pressure as it works to achieve its dream of reunification with the island. However, it could undercut hard-liners who argue for reunification by force if necessary.

Perhaps the most extraordinary thing about the movement is that it is unfolding in a near-total political vacuum. The two governments rarely even talk.

Taiwanese began coming to the mainland in the 1980s, but the pace quickened significantly in recent years. China welcomes them with open arms, and the Taiwanese are blending into Shanghai.

They choose that city because it is not as political as Beijing. It loves to make money. It appreciates Western aesthetics, romantic cafes, and its people speak Mandarin with the soft southern accent that younger Chinese consider more fashionable.

“Before, I had at least one day on the weekend to play golf. Now all I do is play host to friends visiting or moving here from Taiwan,” said Steven Lin, the Taiwanese owner of a Shanghai fast-food chain. “I take them apartment hunting, shopping, eating. I’ve become an official Shanghai tour guide. It’s not just me--all my friends here are in the same boat.”

Taiwanese Go ‘Where the Living Is Good’

The 45-year-old Li, a veteran Taiwanese detective, remade himself into an independent radio producer of nostalgic Taiwanese pop songs.

“I consider myself a global villager. I go where the living is good,” he said. “The mainland has been catching up and Taiwan has been falling behind. In 10 years, there will be no difference between the two.”

While Taiwan remains a prosperous place, its relatively poor economic prospects are largely responsible for the exodus. The jobless rate, though hovering around a low 4%, is the highest in 16 years. The stock market lost more than 40% of its value in the past year. Confidence in the administration of Taiwanese President Chen Shui-bian has plummeted.

Businesses from semiconductor makers to spoon manufacturers--along with pop singers and soap opera stars--are jockeying for a place in the mainland economy, one of the few in the region to emerge unscathed both from the Asian financial crisis of 1997 and the current U.S. downturn.

“If I didn’t leave, I’d be waiting for my business to die,” said Chen Pin, a Taiwanese businessman who has spent 10 years in Shanghai running a stainless steel factory, a bakery and a hot pot restaurant, as well as putting his son through high school and college.

He has parlayed those experiences into three bestselling books in Taiwan that include tips on how to start a new business on the mainland, buy a home, choose a school and marry a local. A fourth book came out this summer.

One of the hottest new television programs in Taipei is a nightly prime-time show from cable station MUCH-TV that features a former Beijing opera star named Hsia Wei, who takes well-known Taiwanese songs and sings them in the Shanghai dialect, explaining the words as she goes.

“Young people watch it with the idea of going there one day,” said Jay Ching, an assistant supervisor at the station.

In a survey published in April by the glossy Taipei magazine Business Next, which is aimed at young professionals, 64% of those questioned said they would be willing to work on the mainland. The figure was eight times greater than a year ago.

In the last 30 years, Taiwan has seen three major emigration waves. The first was in 1971, after Taiwan lost its seat in the United Nations to Communist China. The second was in 1979, after Washington established diplomatic relations with Beijing. Both times, the emigrants’ top choice was North America.

The current exodus to China picked up last year after the island’s balloting for president. The election of Chen Shui-bian ended 50 years of Nationalist rule in Taiwan. Euphoria soon gave way to the harsh realities of economic slowdown and political uncertainty.

“All you need is about $10,000 a year and you can live very well in China,” said Chen Pin, the businessman-turned-author. “And there is no need to learn a new language and get used to a new culture.”

Taiwan’s Ministry of Economic Affairs says Taiwanese poured $2.6 billion into mainland China last year, more than twice the amount in 1999. But the real figure probably is closer to $5 billion, since many Taiwanese businesses invest through third-party territories such as the U.S. and Hong Kong. The Shanghai government alone approved more than 3,800 projects involving Taiwanese investment in the year ended in October.

Winston Wong, the son of Taiwan’s biggest tycoon, is collaborating with Jiang Mianheng, one of Chinese President Jiang Zemin’s sons, on a $1.6-billion project to make components for computer chips in Shanghai. The island’s biggest chip maker, Taiwan Semiconductor Manufacturing Corp., is building a plant nearby.

Shift Puts Taiwan’s Policymakers in a Bind

Such developments create a major dilemma for Taipei’s policymakers. Do they stand back and watch as the information technology sector--a de facto nationaltreasure--moves to the land of their political adversaries? Or do they try to block the shift and risk killing off the entire sector by depriving it of the cost advantage needed to compete in a global economy?

Because Taiwan is the largest single foreign supplier to the United States of silicon chips, computers and computer components, the migration of its high-tech production to the mainland has security ramifications for Americans as well. While the issue has become fodder for think tank debate, there has been no official reaction yet from Washington.

A vast majority of newcomers to Shanghai, however, remain the small and medium-sized entrepreneurs looking for room to grow. In the 1980s and early ‘90s, they were mostly toy and shoe manufacturers who pinned their hopes on the southern provinces of Fujian and Guangdong for market opportunities and cheap labor. Now newcomers from traditional manufacturers to high-tech telecom firms have all discovered cosmopolitan Shanghai.

“The reason for coming to China is very different today. Before, it was just to make money. Now it is also to have fun, to raise a family and to retire,” said Lin, the fast-food chain owner, who plans to move his wife and son here this summer.

“The Communists are not the Communists of 40 years ago,” he added. “Forty years ago, the cadres had nothing, so they could change policy overnight and have nothing to lose. Today their salaries are high, they drive cars and eat well, all because of reform and foreign investment. If they drive out foreign investment, they will be the biggest losers.”

Li, the former policeman, commuted between Shanghai and Taiwan for seven years before his wife and children joined him last year.

“More than anything else, I like Shanghai’s hope,” said his wife, Eileen Li. She was a radio personality in Taichung, in central Taiwan, but started over here as an executive for a Taiwanese cosmetics firm. “I never wanted to leave Taiwan. Now I know I did the right thing.”

In a way, she has come full circle: Her father was a Shanghai native. When Nationalist forces retreated to Taiwan, he was a 15-year-old apprentice at a barbershop. He was swept up by refugees running for their lives and clamoring for the outbound ships.

He spent the rest of his life in Taiwan. Now his daughter is raising his grandchildren in his hometown.

That means enrolling the children in local schools. Li’s 9-year-old son, Kuan Kuan, and 5-year-old girl, Shan Shan, are adjusting faster than their parents to hearing the Communist national anthem, reading the mainland’s simplified characters and turning the pages of books from right to left instead of left to right.

“I was very worried that my son would grow up Communist,” said Eileen Li. “But then I realized in 20 years, those boundaries and identities will become meaningless.”

Despite a shared language and history, five decades of propaganda from both sides has produced many stereotypes. Economic disparity between the well-off Taiwanese and poor mainlanders only fuels misunderstanding.

Chen Pin said rural areas still welcome Taiwanese as heroes because of their money, but more sophisticated Shanghai often regards them as opportunists who mainly eat, womanize and let their money do all the talking.

Still, parts of Shanghai already feel very much like Taipei.

From huge shopping complexes to chic boutiques, from 24-hour fast-food restaurants to milk-tea shops with as many flavors as Baskin-Robbins, newcomers from Taiwan are making fortunes and tinkering with the way Shanghai eats, dresses and thinks.

Taiwanese enclaves have sprung up in the upscale Gubei residential area where the Li family lives. Karaoke bars, tea parlors and noodle shops featuring the taste of Taiwan have turned streets like Xianxia into Little Taipeis. Other communities, like the town of Kunshan near Shanghai, were built almost entirely by Taiwanese.

“The Shanghainese used to be very rude,” said Lin, 49, whose Yong He King fast-food outlets introduced 24-hour operation to the city.

“Entering a restaurant, you would never hear the words ‘welcome’ or ‘thank you.’ The workers thought it was embarrassing. They were proletarians. Why should they say such silly things?”

Lin changed the ways of his employees by putting them through military-like training before they could put on an apron and serve soup.

Like all great cities, however, Shanghai is fiercely competitive and fickle.

Lin’s traditional soy milk and fried doughnuts transformed the way Shanghai ate breakfast. But success nearly killed the business. It spawned hundreds of copycats, which quickly went belly up because Shanghai lost interest. A shot of venture capital saved Lin’s business but forced him to innovate frequently to keep up with Shanghai’s picky clientele.

“I’ve seen too many people come with suitcases full of money and lose everything,” said Jimmy Li, who started out in the early 1990s producing a radio show using his wife in Taiwan as the star deejay. It was an instant success because a voice from Taiwan was practically never heard on Chinese airwaves. Then government officials became uncomfortable with its popularity and shut him down.

Li salvaged his program by grooming a young Shanghai woman as his new celebrity host.

“You’ve got to know your market,” he said. “To do that, you’ve got to live here, plant roots here.”

Li’s children still ask tricky questions: If we are all Chinese, why is Jiang Zemin the chairman and Chen Shui-bian the president? Or, Communists and Nationalists--who are the good guys and who are the bad guys?

Those are the same questions the adults are trying to answer, or playing down by their example.

“China’s problems will be solved by economics, not missiles,” said Lin. “When China is strong, Taiwan will want to come back automatically. Many of us already feel as if we are part of one country.”