Economic Benefit Matters More Than Politics

Taiwanese companies have no choice but to set up manufacturing plants in China. Most of the time, the drivers for such move are either their customers or their competitors .

Most Taiwanese companies engage in contract manufacturing. Very often, before awarding purchasing contracts to them, their customers will ask the Taiwanese companies if they have plants in China. The reason is simple. These customers know that in 5 years ' time, Taiwan will not be competitive compared with China. By selecting manufacturing partners with facilities in China, they do not have to worry about cost issues and can afford to work with the Taiwanese manufacturing for quite some time. After all, it is very costly to switch manufacturer partners .

In other cases, Taiwanese companies move into China because their customers go there. These customers will need support in China and therefore they have to move along with the customers.

Having manufacturing facilities in China is definitely a competitive advantage that many will not want to miss .