BY RICHARD R. VUYLSTEKE

One of the hottest topics these days in Taiwan is "China fever." The rise of China as the "workshop" for the world and the shift of Taiwan manufacturing operations across the Strait - by both local companies and multinationals (MNCs) - have intensified fears of Taiwan's economic marginalization.

Are there cures for this fever? Two come to mind. The first requires clear thinking about "integration" and "differentiation." Taiwan needs to come to terms with the reality that its economic integration with China is here to stay. The two economies are already integrated across a broad range of business sectors, and that trend will continue, no matter what government policies are put in place. Businesses are driven by the bottom line and stockholder expectations. Either they find ways to circumvent unreasonable government restrictions (note the Taiwanese business model of registering operations in offshore locations) or they will vote with their feet by moving to more welcoming environments. That means goodbye to tax revenues, jobs, and technology transfer opportunities.

BY LUCIEN CROWDER

MACROECONOMICS
MIXED BAG

CROSS-STRAIT RELATIONS
FLURRY OF U.S. STATEMENTS

DOMESTIC NEWS
ENERGY CONFERENCE HELD

INTERNATIONAL
FISHING DISPUTE HEATS UP with japan

BUSINESS
BENQ ACQUIRES SIEMENS UNIT
CHINESE LENDERS GET CLOSER
FOUL-UP AT FUBON
JOINT VENTURE LAUNCHED
NANOTECH CONFERENCE SLATED FOR SEPTEMBER

Makers of diagnostic medical devices will be able to continue importing their products through December, even if registration procedures haven't been completed.

* Getting fake drugs off the market
* Preparing for a future epidemic
* Expanding sewerage connectivity
* Blocking counterfeit agro-chemicals

BY Lin Mei-Chun