Taiwanese Firms in China

How Taiwanese businesses invested heavily in mainland China from the 1990s, building factories in coastal cities, and how rising tensions led to diversification.

Despite political tensions, Taiwanese firms invested heavily in mainland China.

Taishang

Taiwanese businesspeople in China are called Taishang.

Investment wave

From the 1990s, Taiwanese firms moved factories to China for low wages and shared language.
They clustered in the Pearl River Delta and around Shanghai and Suzhou.

Scale

Taiwanese companies became among the largest foreign investors in China, running factories employing millions of workers.

Trade ties

China became Taiwan’s largest export market.

ECFA

In 2010, Taiwan and China signed the Economic Cooperation Framework Agreement reducing tariffs.

Diversification

Rising wages in China, US-China tensions and security concerns led Taiwanese firms to move production to Vietnam, India, Mexico and back to Taiwan.
Taiwan’s New Southbound Policy (2016) encouraged ties with Southeast and South Asia.

Lesson

Economic integration can coexist with political tension, but risks drive diversification.

The Suzhou factory

A Taiwanese laptop maker built huge factories in Suzhou in the 2000s, and later opened new plants in Vietnam to reduce risk.

Thinking political tension stops economic ties

Taiwanese firms invested heavily in China despite tensions.

Key takeaways

Taiwanese firms invested heavily in China from the 1990s.
China became Taiwan's largest export market.
ECFA cut tariffs in 2010.
Firms are diversifying to Vietnam, India and Mexico.