Table: Desperate Straits

The Promise

-- Taiwanese companies no longer see the mainland merely as a cheap manufacturing base but as a market for their products and a place to raise money

-- Taiwan Inc. is pressuring the government to lift a ban on capital-intensive high-tech investments and eventually open direct postal, air, and shipping links

-- Facing a chronic shortage of skilled labor at home, Taiwanese companies are eager to take advantage of the mainland's growing pool of trained engineers

The Peril

-- As the economies of Taiwan and the mainland become increasingly entwined, the Taiwanese risk losing control of both their political and economic destiny

-- With more and more industries moving their production across the strait to China, unemployment in Taiwan, already at a record high, will only worsen

-- By seeking to forge close ties with the mainland, Taiwan risks alienating the Bush Administration, which in recent weeks has tilted away from Beijing

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