Remember the China Conniptions Rule of investing.

That rule, as described in a

March column, states that when China has fits over Taiwan, investors are getting a good buying opportunity. The contretemps makes nervous investors flee the Taiwan market, causing it to drop. However, it recovers once the conniption period ends.

The CCR may be in play once again.

This week, China began military drills in the Taiwan straits -- including bomber drills -- that have revived tensions between the two countries after a few weeks of relative calm. Last night, as New Yorkers slumbered, the maneuvers unnerved the Taiwan stock market, causing the

TWSE

index to drop 385.16, or 4.3%, to 8921.12.

Shares in the two Taiwanese companies available to U.S. investors through American Depositary Receipts or direct listings also fell.

Taiwan Semiconductor

(TSM) - Get Report

dropped 3%, while

Macronix

(MXICY)

was down 4.88%. The three closed-end Taiwanese funds were down or flat:

R O C Taiwan Fund

(ROC)

was down 0.7%;

Taiwan Equity Fund

(TYW)

showed no change; and the

Taiwan Fund

(TWN) - Get Report

was down 1.5%.

In the past, these China-inspired dips have proved to be buying opportunities for nimble investors, although recently, the sliding

Nasdaq

has weighed on the tech-heavy island's share market. In the month leading up to Taiwan's controversial presidential election in late March, the market cratered 16%. Two weeks after the poll, it was up 15%.

The latest round of saber rattling is apparently an attempt by China to intimidate Taiwan leading up to the inauguration of Taiwan's new president

Chen Shui-bian

. In the past, Chen has advocated independence for Taiwan, something the Chinese government says will lead to war between the two nations. While Chen has backed away from that position, the Chinese government wants to send a not-so-subtle reminder of its feelings on the subject to the Taiwanese.

However, the bottom line is that there is no reason to believe what investors most fear, that an actual war between China and Taiwan will happen any time soon. Meanwhile, the reasons to feel comfortable about investing in Taiwan have not changed. The country has a solid macroeconomic outlook, with growth forecast at more than 4%. It has world-class companies, such as Taiwan Semiconductor. And in May,

Morgan Stanley Capital International

will raise Taiwan's weighting in the

Emerging Markets Free

index, which will prompt mutual funds to lift their holdings of Taiwanese shares.

This latest Chinese muscle flexing may last only a day or two. If so, the modest losses felt so far will most likely recover quickly. A longer period of tension would be another story -- and an opportunity to buy.