It is a sign of Shanghai's growing appeal to business in Taiwan that the mainland city was selected as the first in 50 years to receive direct charter flights from the island. Six Taiwan airlines are operating 16 flights between Shanghai and the cities of Taipei and Kaohsiung during the Lunar New Year period. The flights started on Sunday. Guangdong is also a magnet for investment from Taiwan. But Taiwan executives living in the southern province will have to cross the border into Hong Kong to catch flights home for the holiday. 'Shanghai, Jiangsu and Zhejiang have the most Taiwan companies,' said Ye Hui-te, head of the local Taiwan business association. 'Of course, there are a lot of Taiwan companies in Shenzhen and Dongguan but they are close to Hong Kong. So we chose Shanghai for the flights.' The flights are still stopping over in Hong Kong or Macau, but passengers will not have to change planes. Shanghai will be a major winner when, or if, the mainland and Taiwan hammer out their differences and allow direct transport links. The city is just 90 minutes from Taiwan by plane. 'Because of Shanghai's economic development, more and more Taiwan people will come,' Mr Ye said. Shanghai is estimated to have 5,000 Taiwan companies and 200,000 to 300,000 islanders making the city home. Taiwan business executives say Dongguan still has the advantage of cheaper labour, but they believe that government planning is lacking. In Jiangsu and Zhejiang provinces, near Shanghai, local governments are courting Taiwan investors with incentives and good transport links. Growing social ties between Shanghai and Taiwan are also apparent. In the Hongqiao district, 'little Taipei' dishes up beef noodles and Taiwan's other signature dishes. In some circles, speaking with a Taiwan accent is popular. When the popular Taiwan boy band F4 came to Shanghai last year, mobs of teenage girls waited for them outside their hotel. Many Shanghai residents still refer to Taiwan people as bazi, or country bumpkins. But with growing integration even that slur is not as common as before. Economic links are also becoming stronger. Trade between Shanghai and Taiwan surged by nearly half last year to US$8.4 billion (HK$65.5 billion), helped by Taiwan firms flocking to the area. The six Taiwan airlines offering the charters will certainly lose money, since the planes will fly empty for part of the route. A late start on selling tickets and lower prices than regular flights also hurt. But the carriers are ready to sacrifice to position themselves for expected direct flights. In the end, the business community will be the main source of pressure on the Taiwan government to permit direct flights.