First things first

In contrast to the reaction of the general public back home, recent visits to the Mainland by leaders of Taiwan's major opposition parties were broadly welcomed in Taiwan-mainland business circles after Lien Chan, leader of Taiwan's leading opposition party, the Kuomintang (KMT) Party, and James Soong, leader of Taiwan's People First Party, pledged to foster peace and prosperity across the Taiwan Strait.

The April 29 meeting between Lien and Chinese President Hu Jintao was the first between Nationalist and Communist party leaders since 1945, and the civil war that soon saw KMT forces retreating to Taiwan, beginning a new chapter in Chinese history.

The fact that the KMT is no longer in power, of course, was an inconvenience and was studiously ignored by both sides as they agreed to "establish a platform" for economic exchanges and trade.

Markets over ideology
Lien warned that Taiwan cannot afford to ignore the Mainland's "huge market" for reasons of ideology while Hu rebuffed an invitation from Taiwan President Chen Shui-bian to visit the island – a little ironic since he promised Lien he would lift travel restrictions preventing Mainlanders from visiting Taiwan.

"It helped that the discussion was economically-oriented, rather than political," says Thomas Chuang, Deputy Director General at Taiwan's Industrial Development & Investment Center (IDIC). He sees friendlier developments piquing investor interest in the Mainland, a good thing since Taiwan investment slowed with Beijing's enactment in March of an "anti-secession" law that sanctions force if Taiwan declares formal independence.

In the first quarter, Taiwan investment in the Mainland declined 6.6% from a year ago, to US$1.27bn, and the number of Taipei-approved mainland projects fell 48% to 289.

"Taiwan needs to face the facts," says Yu Yiming, a Taiwan businessman who relocated his electronics components plant to Shanghai more than 10 years ago. "The whole world is here [in the Mainland]. It should seize the opportunity – economic ties are forever."

James Chou, an island native who now lives in Beijing, says Lien's visit can only facilitate Taiwan's mainland business dealings. "When we meet with the local business people or government officials, we'll feel at ease and less awkward when relations are good," says Chou, whose diversified businesses straddle real estate and manufacturing and employ more than 4,000 workers.

A different voice
Not everyone is keen, though, on the KMT's cross-strait diplomacy. Hsu Reifan, whose ethnic Taiwanese family owns a multi-million dollar chemical trading company in Shanghai, says she is weary of KMT's motivations. Her distrust of the KMT, in fact, reaches back to 1947 and Chiang Kai-shek's crushing of indigenous Taiwanese in what became known as the 228 incident. And even though today's KMT, out of power for several years, is a changed entity, Hsu contends the KMT still can't be trusted. "Lien lost two presidential elections," she says. "That must tell you something."

Hsu says she is all for better Mainland- Taiwan ties, but she still wants "a country to call my own" – and she puts that priority ahead of making millions, as she puts it. "The Mainland hasn't interfered in our affairs for more than 50 years. Why now?" It is a position that finds sympathy among ethnic Taiwanese business people but few others.

Taiwan executives who like the opposition party cross-strait initiative tend to be pretty unenthusiastic about the island's current leadership. "Chen [Shui-bian] has had five years in office to advance the relations between the Taiwan and the Mainland," says George Liu, who runs a Shanghai subsidiary of a major Taiwan semiconductor company. "He has set the relationship back [and] if he continues his attitude, then the situation will turn even more hostile, and Taiwan will spend more on arms, which will exhaust its resources."

Economics as "starting point"
Components executive Yu agrees, arguing the current situation is untenable. "When we buy missiles from the US, we pay a hefty protector fee," he says.

IDIC's Chuang says that, with Lien being credited for making a symbolic breakthrough, "the pressure is squarely on Chen now."

Chip executive Liu says it is high time for Taiwan and the Mainland to really cooperate on the economic front. "Economics should be used as a starting point, because this is where both sides are likely to reach consensus," he says. "Everyone will benefit, particularly Taiwan's agricultural industry [but] it seems Taiwan would rather let its produce rot than export them to the Mainland."

Maybe not for long. Beijing has already said it would eliminate tariffs on a variety of fruit and open the doors wider to other produce from Taiwan – a gesture that some think will boost the KMT's electoral chances in agricultural southern Taiwan where Chen's party already enjoys wide support.

Yu says he endorses unification, although it he allows it might "taste bitter" at first. "Yes, it's hard to swallow Taiwan's integration with China, but if someday our children might run Shanghai, that's a good thing."