TAIPEI: Taiwan businesswoman Doris Lu has spent most of the past eight years in southern China managing her family’s speaker manufacturing factory, but she says that does not make her Chinese in any way.

Although Lu will soon close the family’s remaining businesses in Taiwan and move permanently to Guangdong — with her husband, two children, in-laws and sister-in-law — the 36-year-old is adamant Taiwan should never come under Beijing’s rule.

“China is not a home to me. It is a place to manufacture products and make money,” said Lu.

“Economically the two sides should unite, but politically I don’t think Taiwan can become part of China. I can’t even stand people calling me a Chinese.”

Her words are music to the ears of Taiwan’s pro-independence politicians, who fear growing business and trade ties with China would lead to an eventual political union.

But though many of the estimated one million Taiwan people who live in China say being there only underscores the social and political differences, the underlying threat of increased Taiwan economic dependency on the mainland cannot be ignored.

A recent survey by a local magazine found six out of 10 Taiwan people want to seek better career opportunities in China, adding to the five per cent of the island’s 23 million population who are already there for work or study.

As the exodus of talent grows, from high-tech professionals to entrepreneurs, democratic Taiwan’s once-vibrant economy is in danger of being marginalized — and that can have political consequences, analysts say.

“It will turn into a vicious cycle. Once you lose your competitiveness, you lose your political bargaining chip as well,” said Liao Dachi, a political scientist at the National Sun Yat-sen University.

BITTER FOES OR ECONOMIC PARTNERS?: Taiwan and China have been bitter political and military rivals since a civil war ended in 1949, but their economies are increasingly intertwined as investors like Lu pour up to $100 billion into mainland projects, mostly in manufacturing.

Although local politics is bitterly split between groups favouring independence for self-governing Taiwan and those who want eventual reunification with China, an overwhelming majority of society favours maintaining the ambiguous status quo.

That delicate balance could change if the outflows of money and people continue.

“Eighty per cent of the expatriates in my company are from Taiwan,” said Chiu Chien-ming, a finance executive at a technology firm who relocated to Shanghai with his five-year-old daughter two-and-a-half years ago.

“It’s not just the problem of brain drain. When we move to China, we also take away our spending power. The golden era for Taiwan has passed,” said Chiu.

If the Chinese economy continues to grow at about eight per cent a year while Taiwan plods along at less than half that rate, more Taiwan companies will target China as a low-cost base and growing market in order to be globally competitive.

Students, too, are turning to Chinese universities, hoping mainland degrees will open more doors.

The China Tide Association, which advises Taiwan students on studying in China, said over 1,000 students registered for mainland universities in 2002, more than double the year before even though Taiwan does not recognise Chinese degrees.

These figures bode ill for Taiwan’s unemployment rate, already hovering stubbornly above five per cent at near record-high levels due to the island’s slow recovery from an unprecedented recession in 2001.

“For many, studying or getting a degree is not that important. The most important thing is to establish connections and to pave the way for the future,” said Chung Lung-feng of the China Tide Association.

Although Lu and her peers remain proud of their Taiwan identity, the next generation — children born to Taiwan parents in China — could find their loyalties shifting.

“China is a developing country. I want to be there to grab this opportunity. Taiwan people used to want US or Japanese experiences in the past, but China experience is what is needed most at present, said Matt Lin, 27, who is pursuing a master’s degree in international relations at Shanghai’s Fudan University.—Reuters