Beijing's message for young Taiwanese: We mean business

China's effort to bring Taiwan under mainland control uses plenty of sticks, like the fear of military force. But it's also using carrots – like financial incentives to woo young Taiwanese people fed up with their island's sluggish economy.

Last Tuesday morning, as President Xi Jinping delivered a speech at the closing of China’s annual legislative session in Beijing, Wen Liwei was at work in this coastal city 1,000 miles away. He was too busy meeting with business partners – discussing market strategies for his health food company – to pay it any attention. Besides, his office doesn’t have a television.

Had Mr. Wen watched the address, he would have heard Mr. Xi issue a thinly veiled threat against his homeland, Taiwan, the democratically governed island that Beijing views as a breakaway province. “Any actions and tricks to split China are doomed to failure,” Xi said before the nearly 3,000 members of the National People's Congress, adding that any such attempts “will meet with the people’s condemnation and the punishment of history.”

It was a stern warning at a fraught time for Taiwan. Relations with China have been tense since 2016, when Tsai Ing-wen from the pro-independence Democratic Progressive Party was elected president. Yet they’ve become especially hostile in recent weeks because of a new law passed in Washington that encourages official, high-level visits between the United States and Taiwan. China has never renounced the use of force to reunify Taiwan with the mainland, and last Wednesday, the Global Times, a state-run nationalist newspaper, went as far as to urge Beijing to “prepare itself for a direct military clash in the Taiwan Straits.”

Wen, who’s 29 years old, prefers not to think about the rising tensions. He’s more concerned with sales plans than geopolitics. But that doesn’t mean he isn’t affected by the decisions made in Beijing. Chinese officials consider young Taiwanese a key demographic to win over as they seek to bring the island under the mainland’s control – a mission for which attitudes and income may be as powerful as intimidating fighter jets or naval drills.

With Xi having recently tightened his grip on power, some experts warn that he could press harder for the return of the island. Others predict that he will play the long game. With the help of lawmakers voting overwhelming to abolish presidential term limits earlier this month, Xi can rule for as long as he wants – and his government can try to shift the young Taiwanese generation’s view of their next-door neighbor. 

To that end, Beijing has introduced a growing number of policies aimed at making it easier for Taiwanese to invest, study, and work on the mainland. It announced the latest ones — 31 altogether — on February 28. Wen, who has already qualified for tens of thousands of dollars in government subsidies, is sure to benefit from some of them. But whether they’re enough to buy his political loyalty appears to be a long shot. “I’m Taiwanese,” Wen says. “I think my identity is hard to change.”

Mainland appeal

Wen isn’t entirely new to Fuzhou. He lived here as a child, when his parents owned a textile factory in the city. But when he returned after 24 years in 2016, he barely recognized it. China’s economic boom had transformed Fuzhou into a modern city of more than 7 million people, complete with gleaming skyscrapers, a subway line, and rush-hour traffic jams. “When I was young, the streets were full of tricycles and rickshaws,” Wen says. “It now feels like a different city.”

Wen arrived after graduating from Tamkang University, one of Taiwan’s top schools, with a degree in public administration. Having grown up in a business family, he was eager to start his own e-commerce company – but not in Taiwan. The island’s economy was stagnant and its online shopping industry far less developed than China’s. Then there were the financial incentives on the mainland: about $1,500 for business supplies and two years of free office rent.

It didn’t take long for Wen to find an office. Over the last three years, more than 50 start-up bases have opened across China to serve Taiwanese entrepreneurs. There are at least 17 in Fuzhou alone. The incubators are also open to mainland companies, but they offer the most incentives to those from Taiwan. In addition to free office space, many provide subsidized housing rent and tax breaks.

Wen ultimately settled on the Fuzhou Taiwan Youth Startup Base. Located in a nondescript office building in one of Fuzhou’s many industrial zones, the Startup Base is home to 83 Taiwanese companies that sell everything from cosmetics to car parts. Chen Xiurong, the incubator’s founder, is a Taiwanese native who has lived in Fuzhou for 25 years. She is a strong advocate for young people like Wen who move to the mainland. “Living in Taiwan is waiting for death,” she says. “Going to the mainland is looking for a chance to live.”

Ms. Chen’s grim assessment is based on the fact that China’s economy is growing more than twice as quickly as Taiwan’s. To make matters worse, starting salaries for graduates in Taiwan have remained stagnant since the late 1990s. Rather than waiting for President Tsai to fulfill her promise of creating more opportunities for young people on the island, many have chosen to leave. More than 420,000 Taiwanese now work on the mainland, where they can earn much more than they would in Taiwan.

Many of the 31 new measures revealed last month by China’s Taiwan Affairs Office are meant to make it easier for business entrepreneurs by lowering costs and allowing greater access to the mainland market. An Fengshan, a spokesman for the office, told reporters that the measures would provide “targeted solutions for the benefit of Taiwan society.”

Wen says he would have come to China regardless of the incentives, but he admits that they do make life easier for him. Not that he has found it that difficult to adjust to the mainland. In many ways, Wen prefers living here. There are the small things, like having the ability to pay for almost anything with a smartphone app. Then there are the big things, like the mainland’s fast-paced economy.

When Wen’s friends back home tell him they’re considering moving to China, he tells them to come see for themselves before they decide. One of his closest friends, Luo Yujie, moved to Fuzhou last July after doing exactly that. “There is more space for development on the mainland,” Mr. Luo says. “There are just more opportunities here.”

Brain drain

While Beijing has long targeted business interests in Taiwan as a way to shore up support, it didn’t appear to give much thought to the island’s young people until 2014. That year, a group of protesters broke into Taiwan’s legislature and occupied it for 23 days to block the passage of a new trade pact with the mainland. The youth-led protest became known as the Sunflower Movement, and it made Chinese officials sit up. If unification were still to happen peacefully, then they needed to get young people on board.

“The mainland government started to care more about Taiwanese youth in 2014,” says Zheng Zhenqing, an associate professor of Taiwan studies at Tsinghua University in Beijing. “It was a turning point.”

With Taiwan struggling to jumpstart its sluggish economy, Beijing has resorted to one of its most common tactics: trying to use its economic clout to buy influence. And it’s not only going after budding entrepreneurs. Last year, China’s education ministry said it would relax entrance rules for Taiwanese at mainland universities, and Fujian province announced plans to recruit 1,000 Taiwanese academics to teach at its universities by 2020.

The mainland’s campaign has started to raise alarms in Taipei. Nearly 60 percent of Taiwanese working overseas were employed in China in 2015, according to statistics released by the Taiwanese government last year. Desperate to stem the flow of talent, Tsai’s administration is pushing back.

“Some council members said that young people in Taiwan set great store on democracy and freedom, which is exactly what the environment in mainland Chinese society cannot provide,” Taiwan’s Mainland Affairs Council said in a statement released last Friday. “The government can strengthen and show off Taiwan's advantages, and help young people understand the possible risks.”

On top of the brain drain, Taipei has struggled to compete with an increasingly powerful China in diplomacy. Only 20 countries still formally recognize Taiwan, which is officially known as the Republic of China. Panama ended its relationship with Taiwan last year. The Vatican could be next, as the Holy See and Beijing move closer to a historic deal on the appointment of bishops in China.

Since separating from the mainland at the end of the Chinese Civil War in 1949, Taiwan has become a wealthy, vibrant democracy. The island is functionally independent, and many of its 23 million people want to keep it that way. Opinion polls conducted last year show that 70 to 80 percent of Taiwanese prefer autonomy over unification. Tsai has said that she wants to maintain the status quo, despite her party’s long history of favoring formal independence.

Yet Chinese leaders remain suspicious of Tsai, who has refused to endorse the “One China” principle under which Taiwan is considered a part of China. As relations between the two sides continue to sour, some experts warn that Beijing’s economic campaign and growing hostility could backfire. Richard Bush, a senior fellow at the Brookings Institute and former head of the American Institute in Taiwan, says Xi’s authoritarian tendencies have also disheartened young Taiwanese.

“The general social and political environment in China is bound to affect the way they think about any sort of political union between Taiwan and the mainland,” Mr. Bush says. “One could argue that the direction Xi Jinping has taken China will make Taiwanese much more loyal to their own democratic system, for all its problems.”

Liu Zongxin, a 29-year-old Taiwanese golf instructor in Fuzhou, doesn’t consider himself to be very political. When asked about China-Taiwan relations, he says he just wants the status quo to stay in place. He sees no other option.

Mr. Liu moved to the mainland in 2016 to open a golf school with his older brother. He says adjusting to life here hasn’t been too difficult. His biggest complaint is when locals try talking to him about unifying Taiwan with China. Unfortunately for him, such conversations are happening more and more frequently. It’s the same every time.

“First they talk about our president, then ask about my position, and then they talk about unifying Taiwan by force,” Liu says. “When I hear that, I want to leave.”

Xie Yujuan contributed to this report.