On Christmas Eve, the pandas Tuan Tuan and Yuan Yuan were loaded onto a direct flight from China to Taiwan, then slept for their entire journey across the strait. As we muddle through the current recession, it's hard not to envy the chubby, playful creatures.

As the pandas were making their way here, the curtain fell on the fourth Cross-Strait Economic, Trade and Cultural Forum in Shanghai, at which China proposed ten measures of great potential benefit to Taiwan. They included increasing lending to Taiwanese businesses operating in China; permitting Taiwanese SMEs to receive the kind of incentives and support offered to their mainland counterparts; and allowing Taiwanese businesses to participate in mainland infrastructure projects aimed at increasing domestic demand. The Chinese also pledged to purchase US$2 billion worth of Taiwanese LCD panels.

Taiwanese businesses began to see hints of their present-day troubles two or three years ago, but didn't begin to flee until 2008. Drowning in losses, many have simply abandoned their mainland factories, employees, and debts and slunk back to Taiwan, their decade-plus of sweat and tears all for naught.

Though the mainland has cursed them for leaving it to pick up the pieces, the businesspeople feel wronged as well. After all, it was mainland government policies that left the foreign-invested firms that account for 55% of China's exports with no room for maneuver. Even large Japanese and Korean firms are having trouble operating their businesses in the unpredictable mainland business environment. Times are even tougher for Taiwanese SMEs, which have fewer resources to draw on.

Will the mainland's new measures be enough to overcome Taiwanese businesses' urge to leave? Will Taiwan's years of efforts to lure them back succeed? Torn between the two sides of the strait, what should Taiwanese businesses do for the best? This month's cover story explores these timely questions.

Two months ago, the world was hoping that China would be able to draw on its nearly US$2 trillion in foreign reserves and three decades of double-digit economic growth to ride to the rescue of the global economy. But the steep decline in China's fourth-quarter exports revealed that it was in fact the biggest victim of the global slowdown. Some even began quietly blaming China for the world's financial crisis.

For 20 years, 1.3 billion people have striven to produce goods more cheaply and in greater variety to satisfy the desires of consumers around the world, and especially in the US. Seven of every ten items of clothing produced in China are exported. When American consumers ran out of money to spend, China lent them large amounts, content to earn only a little interest so long as the Americans kept buying. As a result, some now claim the collapse is China's fault, that its "excess exports" were responsible for America's excess consumption!

With exports and global consumer confidence plummeting, protectionism is rearing its head in the US and Europe. The WTO recently ruled against China in an automotive parts complaint filed by manufacturers in the US, Europe, and Canada. Now, the US and Mexico have filed a new complaint about China's export subsidies and alleged unfair trade practices. The coming year will be a difficult one for China's exporters. Taiwan, which depends on Taiwanese-owned businesses in the mainland to drive its own economy, is sure to suffer badly too.

Under the circumstances, working with China and opening up direct flights and other links may be the only way to cope with the global crisis. We must naturally act to help ourselves as well. This month's feature, "Trying to Save Money? Taiwanese Products Deliver," introduces a number of 100% Taiwanese products. While some are not yet well known, and others only niche items, their purchase and use helps support domestic businesses.

In these difficult financial times, many people will find themselves with extra time on their hands. Another article in this month's issue, "Hualien-Taiwan's Garden for the Spirit," introduces a place they might want to consider visiting to get away from it all