If you asked me to name the biggest investors in China, I never would have dreamed of Taiwan.
>>The globe is now dotted with districts hailed as this or that country's answer to
Silicon Valley, of course. But China's digital domain promises to stand out, thanks to
a growing pool of university-trained engineers and a huge potential home market —
not to mention a plentiful labor force. China is already the world's third-largest
manufacturer of PC's sold under brand names like Dell and I.B.M., and it is quickly
moving into more complex product lines.
Most of the investment has come from Taiwan, where rising labor costs, earthquake
risks and eagerness to capture a share of the growing China market have driven
manufacturers across the Taiwan Strait. Taiwan companies committed an estimated
$10 billion to China projects the last two years, most of it in high-technology
ventures. And a recent poll by the Taipei Computer Association found that 90
percent of Taiwan-based high-technology companies have invested or plan to invest
in the mainland.
"It's inevitable," said Winston Wong, scion of Taiwan's most powerful business
family, whose Shanghai semiconductor plant will anchor one end of the technology
corridor. With China entering the World Trade Organization, he said, the mainland
market is too big to ignore.
The Taiwan government outlaws investments in the mainland that exceed $50 million
and bars companies in Taiwan from building digital cameras, laptops or
semiconductors on the mainland — fearing that those industries' geographic shift
would leave the island economically weakened and politically beholden to Beijing.
But under pressure from local businessmen, Taiwan is expected to relax those rules
soon.
Already, Taiwanese investors increasingly ignore the strictures by investing through
offshore companies. The first phase of Mr. Wong's project, for example, will cost
$1.63 billion. And though the company investing that money — the Grace
Semiconductor Manufacturing Corporation — is registered on the Cayman
Islands, much of the financing is expected to come from Taiwan.
Half a dozen pile drivers puff and pound where the first of Mr. Wong's four planned
semiconductor plants will rise in a technology park at the end of Guo Shoujing Road
in Shanghai, named for a 13th-century Chinese astronomer.
"It's very easy to build, it's just a matter of getting together the capital and the
people," said Daniel Wang, the company's vice president, at his temporary office in
a cluster of white, two-story prefabricated buildings on a concrete apron near the
construction site.
Most of that talent and capital can be found locally or can be imported from Taiwan.
There are already a quarter-million people from Taiwan in the Shanghai-Suzhou
area at any one time. And enticing Taiwan engineers to China is increasingly easy
because their purchasing power triples when they come to the mainland. Mr.
Wong's vice chairman is Nasa Tsai, a founder of Mosel-Vitelic, one of Taiwan's
largest semiconductor design companies.<<
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