Conservative estimates put Taiwanese investment in China at almost $50 billion, and it may be as high as $70 billion. Today, Shanghai and the surrounding Yangtze River Delta is almost like a Taipei suburb. With Taiwanese businessmen investing in everything from notebook computer factories and semiconductor manufacturing plants in Greater Shanghai, Taipei's ban on high-tech investment in the mainland is clearly not stopping the exodus from the island.
Chen's government is gingerly moving to liberalize its policies. Taiwanese businessmen, some of the world's most avid capitalists, are going to find a way to follow the market whether the Taipei government lets them or not.
So it's in the interest of Chen's government to get out in front on this issue by making it easier for companies to make the jump while leaving key service operations in Taiwan. That way the island has a chance to become for the Yangtze River Delta what Hong Kong has become for the Pearl River Delta: a hub providing banking, insurance, logistics and research and development.
Beijing and Washington, still angry at one another over the spy-plane incident, need to recognize that they stand to gain from this move, too. China needs Taiwanese dollars and high-tech expertise. President Jiang Zemin's efforts to intimidate the Taiwanese into submitting to Beijing's formula for reunification have not worked. Instead, the Chinese leadership would do well to encourage Taiwanese by treating their companies fairly. Integrating the Chinese and Taiwanese economies is the best hope of peacefully integrating the countries politically.