"If you haven't been to Shanghai, then you haven't been to China. And if you haven't been to Xintiandi, then you haven't been to Shanghai." Xintiandi is Shanghai's new 21st-century landmark.

It is dusk, house lights and streetlights are coming on, and you are walking down one of the many small lanes that characterize the Xintiandi area of Shanghai. The diffuse light of the lanterns glowers over the old houses, like a setting from a dream, bringing one back to Shanghai's boom years a century ago. Nonetheless, when you push open one thick, heavy, lacquered door after another, you are welcomed not by some literary or historical figures of the Republican era, but by dazzling and brightly lit restaurants with spacious, modern decor in an "alternative" style. On this stage for international class restaurants to strut their stuff, the Paulaner Brauhaus operated by Taiwan's Namchow Group, the mango shaved-ice treats of Paulaner Boutique, and the Channel Tea teahouse chain with its zen-like decor, have likewise squeezed into this most grandiose and ambitious city of the 21st century.

The Pauliner Brauhaus, opened in Shanghai by Taiwan's Namchow Group, offers traditional Bavarian food and specially brewed beers, making it one of the top places for Chinese and Western white-collars workers to let their hair down.

It has been said that in Shanghai you will in every corner find a legend, and a fine dining experience as well.

Since Shanghai was forced open to foreign commerce in the Opium War in the mid-19th century, Chinese and foreign merchants have congregated here. It is also a city of immigrants, boasting not only its own local cuisine but also of the food of Anhui, Beijing, Guangdong, Sichuan, Hunan, Shandong, and Henan-16 regional culinary "schools" in all-like a buffet table of dazzling variety. Since economic reform began here in the 1990s, Shanghai has become China's most dynamic boomtown, and today the main commercial districts are more glittering than ever before. Into this city have flooded the best Taiwanese restaurants of all types, offering everything from affordable day-to-day fare to recreational fashion cuisine to high-end gastronomic delicacies, forming a veritable "Taiwanese school" of no small weight and status.

If you walk along the Bund, you will see that many people start the day with a Taiwanese style danbing (egg pancake) or a Taiwanese style beef noodle soup from Yon Ho Soybean or Shanghai Yonghe King. In the pedestrian zone along Nanjing Road, you can see Taiwanese sausages, "pearl milk tea," and Taiwanese baked goods everywhere you look. In the shoppers' paradise around Huaihai Road, Taiwanese coffee shops, "bubble tea shake" shops, traditional teahouses, and casual eateries have become favored hangouts for students and white-collar workers.

As the mainland economy has grown, top-end Taiwanese restaurants have also been hanging out their shingles in Shanghai. These include Ding Tai Fung, famous for their xiaolongbao (steamed miniature dumplings in a basket) and once named by The New York Times as one of the ten best restaurants in the world; the Huahsi Night Market legend Tainan Tan-Tsu-Mien seafood restaurant; and Wang Steak, the largest Western-food chain in Taiwan.

In the Gubei New District, which people call "Little Taiwan," the proliferation of signs in traditional characters makes you feel you are in Taipei. For juicy steamed dumplings, beef noodle soup, or turnip-and-eggs, try Tsai's Kitchen. How about some lurou fan, or a red bean slushie? They've got 'em over at "Little Town of Lukang." And if you miss the taste of the smoked fish, oily steamed bamboo shoots, or wok-friend bean sprouts from Hsiulan's Place, worry not, for the original owner Jen Hsiu-lan is herself in Shanghai. And for something a little spicier, there's always Wu's spicy hotpot.

After eating your fill, you can go to the Yuan Yuan Yuan Tea House or Old Tree Coffee for a "bubble tea shake" or hot Mandarin-orange tea. And if that's not enough for you, in the freezer section of the supermarket you will find Taiwanese-style frozen shuijiao (meat-filled dumplings), instant noodles, and desserts, which have now become common in mainland households and have changed the way mainland Chinese think about eating.

Hot green tea in glass cups, iced tea with syrupy flavorings.... Taiwanese restaurateurs have boldly combined old and new to draw young people back into the world of tea.

Looking back over the history of the "Taiwanese culinary school" in the PRC, you will discover differences between those who came over earliest and those who have arrived more recently.

"Most of the early restaurateurs from Taiwan were not in fact professionals in the field. They just took potshots, trying to make it big from small investments," notes Tainan Tan-Tsu-Mien general manager Chou Wei-pao, who has been closely following the development of the PRC's food industry for more than a decade now.

For example, the first restaurant to enter the PRC, Shanghai Yonghe King, the leader in "Chinese fast food," is an example of success that came rather easily, based simply on being in the right place at the right time, with no great investment of resources.

In 1995, Li Yu-lin was in Shanghai looking for business opportunities. She felt then that the doujiang (soybean milk) and youtiao (deep-fried dough sticks) there were not up to the standards in Taiwan, and anyway they were always sold in makeshift street stalls of highly dubious hygienic properties. She figured that if she opened a doujiang place, at the very least Taiwanese living in Shanghai would come.

So Li dug up a friend who was then living in the US to help out in bringing the "big four" of mainland tradition-doujiang, youtiao, shaobing (stove-fried bread), and fantuan (riceballs)-off the streets and into well-lit, clean, and casual surroundings. This "Chinese fast food" approach proved a hit with PRC consumers, and within three years Shanghai Yonghe King had opened 18 shops in the mainland.

(opposite page) Even a Taiwanese dish as popular among mainland Chinese as beef noodle soup must adapt to mainland tastes. In the PRC you will often see a poached egg added on top of the noodles.

But while the Shanghai market is certainly mouthwatering, it's a real battlefield if you want to succeed. Based on figures from the gas company, Chou Wei-pao estimates that 400-500 new restaurants open each month there, while about 300 go out of business. There are more cases of Taiwanese restaurateurs having gone home with their tails between their legs than there are of them becoming leaders of the pack.

At one time, Taiwanese sausage hawkers and takeaway drink stalls covered the streets. But not long after they got popular, local entrepreneurs followed the Taiwanese example, but stole away the customers by cutting prices. For instance, pearl milk tea was originally marketed as a classy Taiwan treat and sold for RMB8 per cup. But before long the price was driven down to seven cups for RMB10, and now you even see two cups for RMB1, as mainlanders have completely supplanted Taiwanese in the market. "If you want to talk about willingness to suffer pain and cut prices, Taiwanese entrepreneurs just can't beat the mainlanders," says Shanghai Xianzonglin Food and Beverage chairman Albert Wu.

"The model for competition in a place like Shanghai is something that Taiwanese just can't imagine," explains Wang Group vice chairman Park Cheng. He says that in Taiwan, even though there is price competition, people still consider their basic costs. But in the mainland they won't even stop at so-called "blood-letting" (selling at a loss). You can see situations in which a platter of sweets that should cost RMB16 or 17 is being sold for one or two, completely destroying the market. What they're trying to do is to drive all their competitors out of business, and when they have control, then they will make back their money.

Hai Pa Wang Seafood Restaurant, which for a time was all the rage in Shanghai for its "all you can eat" buffet, had a similar experience.

In 1996, Hai Pa Wang came out with an all-you-can-eat buffet at affordable prices, featuring more than 100 different choices. People went crazy for the idea, and you could see lines more than a hundred meters long every afternoon. But the good times didn't last even one year. As a result of a combination of factors-on the one hand Shanghai restaurants copied Hai Pa Wang but at lower prices, and at the same time as the standard of living in Shanghai has been rising people have been moving toward more refined dining experiences-Hai Pa Wang had no choice but to close up shop and go home.

Each and every one of their xiaolongbao is folded 18 times and put into the steamer immediately. Taiwan's Ding Tai Fung has brought its internationally famous name to the home of the xiaolongbao to take the Shanghai challenge.

The PRC accounts for 20% of all people in the world, and spending on food accounts for about 50% of living expenses. According to the PRC's national statistics bureau, total sales in the restaurant industry in 2002 were in excess of RMB500 billion, an increase of 16% over the previous year. This enormous appetite is what is drawing so many restaurateurs to the PRC. It is also creating a high-end market for dining in which the behavior of firms and customers is very different from those at the lower end.

This is especially the case in Shanghai, whose per capita income (RMB13,250 in 2002) per annum ranks number four of any province or municipality in the land. With a top-flight economy and infrastructure of international standards, naturally it has become the place Taiwanese businesspeople most often choose to "hit the beach" and establish a flagship shopfront.

In the past Hong Kong was the largest market for shark fin and abalone. But now 90% of the shark fin and abalone consumed by Chinese is sold within mainland China. Tainan Tan-Tsu-Mien general manager Huang Chun-sheng cannot help but shake his head and sigh: "Prices are completely unreasonable, despite the fact that there is nothing special about the quality. One can of maybe two or three Australian abalone sells for more than three times what its actual cost should be."

On the streets of Beijing or Shanghai, all major restaurants hang out colorful adverts offering shark fin and abalone, and everywhere on the street you can see people selling shark fin stew, which was quite popular in Hong Kong in the 1980s.

As one Shanghai gourmand opines, "China has been through hard times when people would eat mountain vegetables, weeds, leaves, flowers, anything they could get their hands on, rotted grain, immature grain, even the husks of the grain. Now that people have the chance for some luxury, they are grabbing it as if there were no tomorrow." These days people will pay through the nose for opulence, so you can charge RMB3000-10,000 per table for a banquet and you'll still get plenty of takers. Top-end restaurants from Taiwan naturally have jumped right in.

The Tainan Tan-Tsu-Mien seafood restaurant, which got started on Huahsi Street in Taipei and has made a name for its luxurious elegance, opened a branch in Shanghai in July of 2003. Carrying on the traditions it created in Taiwan, the Shanghai branch uses Italian crystal tableware, Mariner imperial chairs from Spain, Wedgwood porcelain from England, Nachtmann crystal glasses from Germany, Christofle silverware from France.... There is nothing that is not a famous brand name.

In a place like mainland China, with its enormous gap between rich and poor, and especially in a hard-nosed city like Shanghai where money talks and everything else walks, "People have deeply ingrained demands about the 'class' of a restaurant," says Tan-Tsu-Mien's Chou Wei-pao. "If they find out that other customers in a restaurant are lower than their personal 'class,' they'll never come again." If you want to survive in Shanghai, defining your place in this rigid hierarchy is a must.

with the best from around the world.

Besides deciding which customer groups to target, establishing a brand name is also critical. These days everything in the mainland is advancing in "leapfrog" fashion. "You start with one thing in the first year, change it significantly in the second year, and then change it completely in the third year." Chou Wei-pao infers from his experience that there is a major new fad every two years in Shanghai, and minor fads (within a given category) come and go even quicker, burning out within three months.

However, while these rapid transformations coincide well with the apparently insatiable desire for novelty among Shanghai consumers, they do not entirely rule out long-term brand name survival. In fact, in this market where brand names come and go on the tide, any brand that does survive must have some truly unsurpassed excellence. That is to say, precisely because such a premium is put on novelty, it is the best test of the genuine durability of a brand.

In this respect, Ding Tai Fung, the top name in xiaolongbao in Taiwan, has been courageous enough to take on the Shanghai challenge.

At Ding Tai Fung, the dough wrapping of each and every xiaolongbao weighs exactly five grams, is folded in such a way as to have precisely 18 wrinkles at the top, and is put in the steamer without the least delay, creating tasty delights with a light and delicate wrapping and juicy filling inside. This spirit of treating xiaolongbao as a delicacy and the specialty of the house is one reason that in 1993 Ding Tai Fung was named one of the world's ten best restaurants by The New York Times, further consolidating its reputation as the top name in xiaolongbao.

In a place like Shanghai, with its vast scale and integration of things Chinese and Western, it's no surprise to see a scene that includes both down-home Taiwanese food (advertised on the sign and in the man's plastic bag) and a Starbucks' coffee shop.

In contrast to the previous wave of Taiwanese restaurateurs, those who have come in most recently have been much better prepared. In today's highly competitive mainland market, "You have to have the people, the money, and the professionalism-we are already in a period with high barriers to entry," states Park Cheng of the Wang Group. "We brought over the very top people from our 33 outlets in Taiwan to make a 'dream team' and take the battle to our competitors," explains Cheng, who has moved his whole family to Shanghai and hasn't been back to Taiwan for more than a year now.

For Wang Steak, which has annual revenues in Taiwan in excess of NT$1 billion and long ago extended its operations to the US, entry into the PRC was obviously rather late. Park Cheng explains: "We did a survey of white-collar workers several years ago and discovered that although Shanghai once did have areas controlled by Britain and France, nobody in Shanghai chose 'Western food' as their preferred option for dinner out." The Western dining experience in Taiwan places as much emphasis on "atmosphere" as on food, and Shanghai people simply didn't see the need for that in their lives.

But the year before last, having been closely watching developments over the previous four to five years, Cheng noticed an influx of bread, coffee, and herbal tea from Taiwan, indicating that the time was right for bringing in Taiwanese restaurants specializing in Western cuisine. That was when Wang Steak made the decision to leap, targeting the middle-aged middle class.

The photo shows a house specialty made with aloe.

Despite being veterans of restaurant wars in Taiwan and the US, Wang Steak found setting up a PRC restaurant to be a very different matter than companies that just go to the mainland to open factories. "It's not just a matter of reproducing the procedures, but is entirely starting from scratch," says Park Cheng. For one thing, getting the right ingredients is not easy.

Wang Steak still gets its beef from the States, but they had to make something as simple as the marinade from scratch, taking them three months to get the formula right. "The Kikkoman soy sauce here simply doesn't taste the same as it does in Taiwan," says Chen. Ding Tai Fung, meanwhile, went all the way to Guangdong in search of ginger to go with their xiaolongbao, but they still found it didn't have the same crisp and refreshing taste of the ginger from Taiwan.

But looked at another way, the mainland, with its size and variety, can offer some things that you can't find in Taiwan. Ding Tai Fung may not have been able to find any ginger in the PRC to match Taiwan's, but in Shanghai they did discover the best crabmeat.

Ou Chin-hsiang, general manager of the Shanghai Ding Tai Fung, which is run as a franchise of the Taiwanese parent, reveals, "In the mainland we use mitten crabs for our minced crabmeat. Seeing as this is the season when the mitten crabs are most plump and delicious, be sure not to miss the crab xiaolongbao。

As the PRC economy has taken off,high-end Taiwanese restaurants like Tainan Tan-Tsu-Mien and Wang Steak have put ashore in Shanghai. Dishes like delicate douzi fish from Taiwan (left) and the special well-done spare rib (right)have been a delightful surprise to mainland diners.

Besides edible ingredients, another challenge for Taiwanese restaurateurs in the PRC is the "human ingredient." This applies to both inside and outside the kitchen. While the mainland does not lack schools in cooking and hostelry, they are still not up to speed in terms of attitudes toward quality and service. For example, one small spoon of salt is 20 grams, but mainland chefs just scoop up a spoonful randomly and sprinkle it on. "If anything is off by even a little bit, then the whole thing gets thrown off by a lot," says Park Cheng. At first, he says, mainland chefs would just dip their fingers right into the saucepan for a taste. "In Taiwan, our chefs are only up to standard by following a ten-step procedure for washing their hands!"

Li Yu-lung, head of the Shanghai branch of Wang Steak, relates that one time he was astounded to see a chef use an ordinary knife to beat eggs. When Li asked him to use the eggbeater, he got up in a huff and declared: "I've got my health certificate!" Li could not help but wonder how it was that two people speaking the same language could misunderstand each other by such a large margin.

Outside the kitchen, the first thing that Taiwanese owners have to teach their people is, believe it or not, to "smile." To encourage their employees to look friendly, Ding Tai Fung each day awards a bonus for the "most radiant smile of the day."

"Details are especially important in the restaurant business. From our point of view, mainland workers are merely doing a job, but Taiwanese waiters and waitresses know that you can only call it 'service' if you really do it well." Ou Chin-hsiang feels that the biggest difference between Taiwan and the PRC is in the quality of the people.

Wang Steak has similarly discovered that service workers in the PRC are lacking in initiative. For example, if a customer's children start to wander about and play, in Taiwan waiters and waitresses will immediately move to see that they stay out of trouble. Or when a customer stands up, a staff member will discreetly point the way toward the bathrooms without waiting to be asked. Now that's showing some real concern for the customer.

"A lot of five-star hotels were opened in Taiwan in the 1980s and 1990s, which trained a large number of outstanding restaurant managers and service people, bringing Taiwan truly into the service era. Although the hardware element in the PRC is developing quickly, it will still take them five to ten years to catch up with Taiwan in the software department," avers Shanghai Baolaina [Pauliner] Company's director of operations, Hazel Cheng.

As the PRC economy has taken off,high-end Taiwanese restaurants like Tainan Tan-Tsu-Mien and Wang Steak have put ashore in Shanghai. Dishes like delicate douzi fish from Taiwan (left) and the special well-done spare rib (right)have been a delightful surprise to mainland diners.

If you want to get to the real meat of the order of the "Taiwanese culinary school" in Shanghai, you have to go to Gubei, which is known as Little Taiwan. Long home to most of the Taiwanese businesspeople in the city, it is, not surprisingly, the place where many Taiwanese restaurants have set up their hearths.

According to official PRC statistics, more than 30,000 Taiwanese businesspeople have taken up long-term residence in Shanghai. And most of these people are from the top of the consumer pyramid, which has had a big impact on high-status restaurants in Taiwan.

"In the past, company owners or managers would come to Tan-Tsu-Mien in Huahsi Street two or three times a month. But once they've moved to the mainland, we might see them back in Taipei only once every three months or so. When you also figure that more and more Japanese tourists are choosing Shanghai, the result is that our core clientele is becoming increasingly focused over here," says general manager Chou Wei-pao, speaking from Shanghai. Similarly, Wang Steak have seen their Taiwan revenues fall by 20% in the last two years, so "following the customers" has become one of the main reasons for Taiwanese restaurants to open shop in the PRC.

Restaurants that set up in Gubei at first mainly served Taiwanese and Japanese clients. But lately the number of mainlanders has been rapidly increasing. In the three months from its opening in July of 2003 to October, the percentage of customers accounted for by mainland Chinese at Wang Steak rose from 20% to 50%. Park Cheng estimates that the number of mainland customers will surpass the number of Taiwanese diners by the end of this year, and could reach 70% of the total. As Taiwanese and Western businesspeople have brought their Chinese contacts into these restaurants, Taiwanese restaurants have steadily built up links with local consumers.

In terms of the age of customers, Wang Steak, which originally targeted middle-aged consumers, has discovered that young office workers-despite making only a few thousand RMB per month-are not to be overlooked. These young people are all from one-child families, and they spend not only their own money but also that of six other adults-their parents and grandparents. When they get married or buy a house, the older generations are sure to help out, so they have few worries about splurging in the now. This is markedly different from the situation in Taiwan, where consumer spending by the young is on the decline.

(left) What could be better than a pearl milk tea on a swing? Xianzonglin has successfully grasped the tastes of the PRC's "petty bourgeoisie."

Nonetheless, while their relative importance is in flux, in both Taiwan and mainland China white-collar workers in their 20s and 30s still constitute the strongest consumer group in absolute terms. Office workers, making RMB5000 per month or more, are looking for some fun out of life. Known in the PRC as the "petty bourgeoisie," their group has given rise to its own tastes and aesthetic. And now, beyond the market for petty bourgeois atmosphere, there is an even higher status market that is developing, that of the "middle class" or "bobos" with bourgeois professions but bohemian artistic tastes.

"These days in the mainland to call someone petty bourgeois is getting to be an insult!" says Sun Xiaoyuan, a reporter for the Beijing Evening News. "Middle class" has become the new standard of living for Chinese.

No matter whether modern or postmodern, classical or neoclassical, or an eclectic mix of old and new, restaurants in the "petty bourgeois" or "middle class" style are friendly, welcoming places, neither pretentiously modern in a cold and snooty way, nor self-consciously old school and superior. Taiwanese have long been good at creating this kind of atmosphere.

Channel Tea, which got started in Taoyuan and now has four directly managed shops in the PRC, is a case in point.

In contrast to the classical style the chain features in Taiwan, the Nanjing West Road shop in Shanghai has comfy sofas and warm lighting. In one corner alone there is a simple Chinese-style window frame, creating a relaxing ambience. In terms of tableware-all designed by Channel Tea itself-the shop has carefully wrought earthenware pots, pastel green tea sets, and delicate glass cups for drinking herbal and floral teas.

The first steps into Shanghai in 2001 for Channel Tea, which now has 500 employees in the PRC, came with a US$2.8 million price tag. They had to build a large central kitchen and then get to work on storefronts and outlets. Obviously they were very determined to succeed.

"We estimate that within ten years we will be directly operating some 260 outlets in the mainland, making us the number one name in Chinese food there," says Channel Tea general manager Chen Ting-yu, attired in a traditional cotton padded jacket. Their attitude toward developing their business in Shanghai is not that of a Taiwanese company expanding into the mainland, but that of a company taking Shanghai as its base to go international. This is because Shanghai is not only the best place to get a foothold in the PRC, it is a great springboard for establishing a brand name that will be recognized around the globe.

Channel Tea, which has successfully established a flagship store in Xintiandi, began by building a large central kitchen, paving the way for expansion of the chain not only in China but internationally as well.

In the highly competitive world of dining out in Shanghai, in which everyone is looking for something that will make them stand out from the crowd, Zaozishu has quite accidentally played a large role in creating a new vegetarian food culture. Song Yuan-po, who was posted to Shanghai by a real estate company ten years ago, became a vegetarian after his mother was diagnosed with cancer in 2000. But it was very difficult to find a suitable restaurant anywhere in the PRC back then, so Song decided to open his first Zaozishu, whose pronunciation in Chinese is homophonous for the expression "the sooner you start eating vegetarian, the better."

Although there are a few venerable old vegetarian restaurants left in Shanghai (such as Gongdelin and Songyuelou), vegetarian dining is largely restricted to those with religious motives. Most folks still consider vegetarian cuisine to be for the poor, and therefore an embarrassment. However, using plate glass windows and simple but well-wrought small wooden tables, Song has integrated vegetarian food with trendy health and beauty concepts-not to mention offering more than 200 ever-changing dishes on the buffet table-to draw young people into his establishment.

"The best ingredients in the whole world for vegetarian food come from Taiwan, and the standards of refinement for vegetarian dining are set there," states Song. In fact, while mainland Chinese are starting to open vegetarian restaurants, nearly all the upstream suppliers are run by Taiwanese.

But the reason that Zaozishu is so famous in the mainland vegetarian food field is not only because of its rich variety of dishes, but because Song Yuan-po has created a clean and fresh environment free of smoke, alcohol, eggs, or animal flesh, a world of feeling, meaning, and taste. He gives half the income from the restaurant to charity, and once a month he hosts a free dinner for a guest list that includes volunteer teachers and lonely elderly people with no families. He also works to promote environmental, conservation, and animal-rights values in the PRC, so that the vegetarian outlook on life can set down deeper roots, and not just be limited to eating habits or health.

The entry (or should we say entree) of Taiwan restaurants into the mainland has brought some convergence in eating habits, and has also been a real stimulation to culinary culture. Even more, however, it sets the stage for the restaurant industries on the two sides to push each other to new heights.

For instance, chefs in Shanghai have a very solid grounding, and they are ahead of the Taiwanese in basic skills, especially knife work. More points for the mainland side are racked up by the many venerable old recipes and multiple-course meals that trace their origins back into the mists of time.

However, Taiwan cuisine has the advantages of greater exposure to more outside influences, and more creativity. "The restaurant industry in Taiwan can take something very simple and wrap it up in a very interesting way. Take a look at things like mango shaved-ice platters and pearl milk tea, and I think you'll agree with me," says Shanghai Baolaina general manager Dawn Chen. For example, these days five-star restaurants in Taiwan are offering Aboriginal cuisine. The new culinary culture that Taiwan brings will open up the eyes-and mouths-of mainland Chinese to new experiences, and will have an enlightening impact on the mainland restaurant business.

The great modern Chinese intellectual Lin Yu-tang said, "When Chinese eat, they not only eat 'food,' but even more eat 'flavor.' What they appreciate is a kind of abstract feeling." When you think about it, perhaps the most central thing that Taiwanese restaurateurs bring to the mainland is just that kind of abstract "flavor."