Southeast 's renowned Dongguan City in Province, an industrial center that claims to be the "shoe factory for the ," has begun to see the grim reality of the global . Orders have dropped sharply, capital has become difficult, raw materials and labor costs have risen, and factories have been forced to close down in a city whose depends so much on exports.

HOT HOUSE: Staff tend to flowers at a Taiwanese-owned greenhouse in Xiamen, Province

Since the late 1980s, the city has been to many shoe factories started by Taiwanese entrepreneurs. These factories gradually developed into OEM (Original Equipment Manufacture) for international brands like Nike and Adidas. As a result, the city grew full with Taiwanese firms.

But now times have become hard for these firms, and Dongguan is not the only city where the worldwide is threatening to shutter Taiwanese enterprises. The Association of Enterprises on the Mainland (ATIEM) released a survey of 1,500 -funded companies and the results showed that half of them are suffering so greatly that they had to scale back their normal operations.

"We feel their pain," said Li Yafei, an official with the Affairs Office of the State Council who is also secretary general of the Association for Relations Across the Straits. The country is working at a series of policies to support -funded enterprises, Li said.

"It was way beyond our expectations that the would have such a profound impact on these entities," said Zhang Hanwen, President of ATIEM.

Zhang used to be called "Daddy Zhang" because he was one of the earliest pioneers to venture to the mainland. In 1991, he invested in his first project starting a shoe workshop that had only one production line. "After one year of operation, the was good and I decided to expand the production," he said.

Now he owns several companies that make , and printing. Though he is getting near his retirement age, Zhang will not leave until he proves that -funded enterprises can make it through the hard times.

"It is not the same economic situation as when I first arrived on the mainland," Zhang said. "In my time, transportation in Dongguan was completely backward and there was not even any taxi service."

It is the continuous improvement of the economic environment that has lured increasing numbers of Taiwanese investors to the mainland, he said. In his opinion, the mainland has labor and resource advantages to which Taiwanese investors bring capital, and clients. Those Taiwanese investors are closely tied to 's progress of reform and opening up, he said, being its witnesses, participants and beneficiaries. "Such cooperative and complementary economic patterns benefit both sides of the Straits," Zhang said.

Though the for and clothes is still on its way to , many Taiwanese businessmen have demonstrated their faith as they have rented new booths in a commodity in Shaoxing, Province, which is 's largest light textile city.

"Taiwanese entrepreneurs need to huddle together to maintain warmth. 's central and local governments have provided many preferential policies, as well. Their kindness and sincerity have also boosted our faith," said Zhang.

Financing problem

"The breaking of the funding chain is a more horrible thing than the decline of orders," said Li Zhanhao, head of a Taiwanese investors association in Jiaxing, Province. An enterprise can hold on for a while if the orders go down, but if the chain breaks, it would come to a quick death, Li said.

BUSINESS ACROSS STRAITS: A worker busy on a production line at a products factory owned by Taiwanese entrepreneurs in Dongguan City, Province

As many Taiwanese enterprises are small in scale, they have a hard time getting mortgages on assets and land, and they have insufficient credit when they try to raise funds. "In the risk assessment, the can't build trust in the enterprises by one or two inspections, thus the mortgages on land are unavoidable," said Wei Guoxiong, Chief Risk Officer at the Industrial and Commercial .

During 2008's Fourth Cross-straits , Trade and Culture Forum, three large institutions- Development , Industrial and Commercial , and -decided to provide -funded enterprises with support totaling 130 billion ($18.8 billion) over three years. The of 's Nanjing branch also inked agreements with the city to offer a 3-billion- ($434 million) loan to -funded enterprises over two years.

"The key to solving the difficulty for the Taiwanese enterprises is guaranteed mortgages," said Wang Yi, head of the Affairs Office of the State Council. Ten new policies were revealed at the Fourth Cross-straits , Trade and Culture Forum, the first of its kind that supported the finances, taxation and credit for small and medium-sized enterprises, including those from .

Upgrades

At the end of 2008, a group consisting of professionals from both sides was formed in Dongguan to provide services on policies, information, , patent rights transfer and talent training. It is also a concrete measure of the 10 new supportive policies.

"The enterprises carry many problems with them, that's also one big reason why they are affected by the global ," said Zhang, who is also vice president of the group. Though some of the -funded enterprises have made big , they are still at the lower end of the chain, with a few disadvantages such as weak power, low-level management and lack of of the national policies.

In fact, the Taiwanese businessmen's association has already formed a committee to boost the upgrade and transformation of the small and medium-sized -funded enterprises. The local has put up platforms to help them fulfill the mission.

"We are so aware of their situation and we have been appealing for a more open and tolerant . But the emphasis must be put on the upgrade and transformation, that's the fundamental way for these enterprises to survive," said Chen Xihui, an official with the city's affairs bureau. He said in the long run these Taiwanese enterprises have to expand their research capacity, raise the added values of their products and aim at not just the foreign but also the domestic .

In 1995, a Taiwanese cyclist seized the opportunity of the mainland's economic opening up, gave up his career and established a to sell Giant bicycles. Now his bicycles have been sold to 70 countries and regions all over the . The had set up a production base in and another being built in is said to be the 's largest bicycle factory.

"The mainland is expanding, like in real estate, construction, and the service sector," said Zhang, who added that Taiwanese entrepreneurs will not be confined to the processing and businesses, because they have the ability to be involved in other fields and foreign projects.

The ATIEM is headquartered in Beijing. "The association notifies its members in time when there are ," said Zhang, the association's president.

The association is also helping build a more stable and relaxing environment for the Taiwanese businessmen to live and work. Schools have been set up to give to their children who were once left at on the other side of the Straits.