Starting this month, Taiwan is allowing for the first time in six decades direct investment from mainland China to 64 sectors of manufacturing, 25 in services and 11 public infrastructure projects. The plastics industry is included in the list.

A little background: Taiwan has restricted business activities with mainland China since the two sides split at the end of a civil war in 1949. However, since the mainland opened up for Taiwanese investment two decades ago, the amount of Taiwanese investment on the mainland has reached US$77 billion according to official records. Now appears to be the time to balance that flow of money.

But, given China's undisputable advantages in manufacturing, what types of investment opportunities would be able to attract mainland Chinese businesses to invest in Taiwan's plastic manufacturing industry?

When I raised this question to a panel of Taiwanese trade officials at a cross-strait forum in Guangzhou before this year's Chinaplas show, the answer was: "While Taiwanese firms have gained tremendous knowledge of the mainland during the past two decades, the mainland businesses know little about Taiwan's plastic industry and market. In order for them to discover investment opportunities, the first step should be send trade missions to Taiwan for first-hand intelligence."

It doesn't take a trade mission to realize that, compared to mainland China, Taiwan's plastics industry doesn't offer competitive advantages in labor cost, scale of economy, readiness of entire supply chain, local market potential or government incentives/subsidies.

In my opinion, Taiwan's strengths that mainland China hopes to take advantage of lie in the fields of design, high-tech manufacturing and global trade.

When it comes to plastics manufacturing, the most convenient example would be India's antidumping charges on Chinese injection machines. The trade barrier doesn't apply on machines made in Taiwan. Perhaps mainland press makers can start assembling presses in Taiwan and ship them through the South China Sea to India?

I also believe that Taiwan has plenty of reasons to want to work with the mainland, which accounts for more than one-fifth of Taiwan's total foreign trade volume. As Mr. Huang Wenrong with the Taipei World Trade Center put it at the cross-strait conference, buyers from all over the world are doing one-stop shopping in mainland China, threatening regional shows like Taipei Plas. Meantime, Huang said, Taiwan can contribute with its experience in dealing with global downturns, which China lacks.