Headline January 25, 2017/ ''' LITTLE *TAIWAN* LITTLE ''

''' LITTLE *TAIWAN* LITTLE '''

*MILKING THE DRAGON* : Multinationals from other countries complain about the conditions in China that keep them from making a profit-

But the Taiwanese just quietly go about their business of making money. If the system works through bribes, they bribe. 

And, not to put too fine a point on it, they are not unduly burdened by western standards of employee or environmental protection.

Ailing Lai, boss of  Thunder Tiger, which makes model airplanes in its China factory, scoffs at those who claim the mainland is a tough place to turn a buck. 

''Opening a factory in China today is easier than opening a factory was in Taiwan 20 years ago. It's got better infrastructure, highways, ports and the cost of labor is one-twentieth that of Taiwan.''

No wonder nearly half of all listed Taiwanese firms have manufacturing operations on the mainland, and investment in China rose 22% in the first seven months of the year in 1999.

The coastal factory towns of mainland China are Taiwan's  Wild West,  with the same gold rush excitement   -and some very corresponding risks.

In places such as Dongguan, it is hard to remember that it is only some decade and half a go that since Taiwan's government allowed its citizens to do business in China.

In this  sub-province of 1 million  permanent inhabitants,  25,000 Taiwanese businessmen run  4,000 factories  that together employ 2 million mostly migrant workers. 

In one township there are hundreds of hundreds of shoefactories, in another similar numbers assembling computers or sewing hats. 

A web of Taiwanese suppliers and subcontractors have come over with them, replicating [often on a much larger scale] most of the  industrial Taiwan.

In very late 1990s Taiwanese investment in China had reached an estimated and growing $38 billion.

It is  a hard life for the Taiwanese businessmen [and almost  all of them are men]. Like their workers, they usually live in their factories. They work almost all the time. 

It is no place for families, since it is not safe to leave the walled factory compounds after dark. But the rewards are commensurate : high management salaries,booming business and limitless cheap labour.

For light relief, there is frontier Karoke nightlife [which accounts for many of those calls to the emergency line: the locals sometimes find the rich Taiwanese a bit loud: ''We drink together, sing together and enjoy the charms of Dongguman's many inexpensive businesses] together,''  says Mr Lou.

''And the next day, when we need a supplier at short notice, we just call each other up and it is done.''

The importance of Dongguan, and other centres of Taiwanese investment in China, can hardly be overestimated.

Today china seems to hold the future of  Taiwan Inc   -an almost limitless hinterland, with some of the lowest wages in the world, and a huge pool of educated technical workers ready for the next step up.

And that is just an export base.

China is already a big and growing market too, and nobody knows it better than the Taiwanese.

Investments in china has allowed Taiwan to leverage its strengths in a remarkable way, giving it a high standard of living at home while retaining the competitive labor advantages of its poor and underdeveloped past.

*The result of this rush across the straits is that Taiwanese businesses have created a huge parallel economy in China, almost indistinguishable from China's own*. 

By some estimates, up to a third of consumer goods for exports marked ''Made in China'' are actually made by Taiwanese owned firms. Analysts attribute more than 70% of growth in America's trade deficit with China to the exports of Taiwanese firms.

Yet to outside eyes this parallel economy is almost invisible: ethnic Chinese working with ethnic Chinese, speaking the same language [Mandarin, although Money runs a close second].

There are few outward signs of Taiwanese ownership aside from the occasional  ''KTV''  signs that give the game away. Karaoke TV is a Taiwanese passion.

But many in Taiwan worry that the China trade may be the seed of their destruction. The more Taiwan becomes an island of hollowed-out-headquarters dependent on factories in China, they fear. the worse.

The Taiwanese government's official policy is to  ''go slow'', and it specifically bans big infrastructure projects, such as roads, power plants or anything else that might help the mainland's military machine.

Quite apart from general unease about China's intentions, officials say that overdependence on any one country is simply unwise.

They also worry that the ability to stay in  labor-intensive  industries by moving across the straits make Taiwanese companies lazy about climbing the technology ladder to more automation and innovation.  

Even as politics struggles to keep the countries apart, economics pull them ever more strongly together.

*What kind of future does this predict?*

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