ECONOMIC NECESSITY PREVAILED

     From an economic standpoint, Taiwan and China make perfect partners-China provides cheaper labor, raw materials, land and other natural resources, while Taiwan furnishes capital, capital goods, management expertise, and development skills. This, in addition to geographical advantages and language and cultural similarities, naturally propels the two economies into one efficient and productive linkage, unstoppable under attempted containment by the Taiwan government.

     So in the wake and as a result of the world-renowned economic miracle, Taiwan's energetic small and medium-size businessmen have in the mid-80s discovered their absolute necessity to, while their government looked the other way, invest tons of money to relocate and further upgrade their enterprises in mainland China.

     This was because Taiwan's small and medium enterprises, the main driving force behind its economic miracle which were mostly highly labor-intensive, found that they had run out of room inside Taiwan-land and space literally were hard to come by, but particularly due to the scarcity and higher cost of labor. What China had to offer in these areas was simply too good to pass up. So initially in the mid-80s, even though they knew this movement was against the law, they invented all kinds of creative means-such as black market foreign exchange, indirect media outside Taiwan, using personal rather than business identifications, etc., etc.-to invest and trade with China. By then, China had also loosened up its tight political and economical controls and realized the advantages of such unofficial bilateral activities.

     From a political angle, Taiwan had lost most of its international status, as I pointed out before, and was desperate for a break-through. Taiwan's government privately aided and abetted its business communities to invade China also in the hope that this might create some bargaining chips against China in exchange for political concessions and more diplomatic breathing room. Unfortunately however, due to indecision and lack of resolve, such golden opportunity was lost at the opportune time when it would have counted. By the time the floodgates flung wide open and the tide turned it was too late already. Even the basic human rights and legal protection of Taiwanese businessmen. Their employees and investments were now hard to secure.