Taiwan's investors head to the mainland in search of more lucrative hi-tech start-up opportunities
Taiwanese companies have long been investing in the mainland, accounting for the lion's share of foreign investment on the mainland.
About 20 years ago traditional Taiwanese companies that churned out everything from toys to buttons began to use the mainland as a factory base. This trend pushed electronics manufacturers to shift production, focusing on cutting costs to boost earnings and margins on global sales.
Now the moneymen are following them by throwing cash at projects that could be the next Lenovo or Baidu.com. Taiwanese venture capital outfits such as VinceraVentures, AsiaTech and iD TechVentures are setting up branch offices and subsidiaries from Shanghai to Guangzhou to find small companies with the potential to grow. Even those without offices have been pumping in money via the circuitous route of offshore channels.
And there is the rub - as the mainland booms, many Taiwan-based companies head across the strait and investors are following them. The mainland offers bigger and brighter opportunities among start-ups in the technology, internet, telecommunications and hardware manufacturing sectors, and could end up sucking in ever larger wads of cash.
'There is a lot of action in China, so naturally we have to expand,' said Richard Chen, chairman of VinceraVentures and Taiwan's Venture Capital Association (TVCA). 'Our advantage is to take a Greater China view rather than just a Taiwan view.'