“Compatriots on both sides are part of the same family,” Wang Yi, head of China's Taiwan Affairs Office said. “We feel the same pain.” Not half. Taiwan, along with other parts of the Chinese diaspora like Hong Kong and Singapore, accounts for the majority of foreign direct investment into China. Taiwan's share clocks in at about 7 per cent in the 15 years to 2004, or more on the assumption some is routed through Hong Kong. Taiwanese manufacturers headed across the Straits in search of cheaper land and wages and are now reckoned to have invested some $150bn in China.
Alas, it is easier to see China's largesse back-firing rather than giving Taiwan a boost. First, the numbers are small: $2bn represents maybe 6 per cent of Taiwan's annual panel sales. Ordering China's banks, which are essentially domestic lenders, to make loans overseas will undoubtedly tax their risk-assessment skills; and any bad loans will hardly cement relations. Chinese aid is no cure-all, as evidenced by Hong Kong's closer economic partnership arrangement – styled by Beijing as a “win-win” deal that turned out to bring very limited benefits to the territory. It beats bellicose rhetoric, of course, but Taiwan should hardly expect something for nothing.