Drawn by increasing salaries and often by a desire to take care of aging parents, more and more Taiwan residents are returning.

Industry executives say Taiwan residents moved several billion dollars into offshore and overseas bank accounts after China began a series of military tests near the island in mid-1995.

Mr. Chen expedited an agreement on direct holiday charter flights to ferry Taiwan residents to the mainland.

Officially, Taiwan residents are allowed to go to the mainland only to visit relatives, but many also go to sightsee or even to do business.

The hope is that this open-mindedness will gradually encourage Taiwan residents to favor reunification with the motherland.

"We're delighted to come here, because it's so full of history," said one Taiwan resident who was touring with his family but declined to give his name.

"Taiwan residents share the view that the only way out for Taiwan is to develop relations across the Taiwan Strait."

This entry permit is practically the only valid identity document for Taiwan residents in mainland China.

New rules also make it much easier for Taiwan residents to travel abroad; they may even be allowed to visit mainland China soon.

But most Taiwan residents seem quite happy to continue with the status quo, even if they acknowledge that it is a bit phony.