Lively shopping districts reminiscent of Taipei, grandiose temples dedicated to the gods revered across the island, and bustling factories can be found throughout the eastern Chinese city of Kunshan, which has long been a focal point for Taiwanese enterprises.
But now those firms are feeling the strain from cross-Strait tensions that have stoked safety fears among companies.
Mandarin-speaking Taiwanese businesspeople, referred to as "Taishang," have invested billions of dollars into Mainland China since relations started improving in the 1990s, significantly contributing to its growth into the globe's second-biggest economy.
However, their count has decreased significantly in recent times, with the figure of Taiwanese people employed in China falling from 409,000 in 2009 to just 177,000 in 2022, as per estimations shared with AFP by the non-governmental organization Straits Exchange Foundation, which serves as an informal liaison between Taipei and Beijing.
The organization states that China's economic deceleration and increasing trade frictions with Washington are partly to blame.
However, James Lee, a 78-year-old Taiwanese businessman from the manufacturing sector, who had to shut down his cable and electrical component plant in South Guangdong Province in 2022, attributes this closure to "political reasons."
"You have to be very careful when you speak," Lee told AFP.
The Taiwanese businesspeople are fearful.
Empowered by their command of Mandarin and sharp business skills, Taishang have thrived as cunning go-betweens for global markets and China’s extensive industrial production sector.
One of the most well-known figures in this group is Terry Gou, who founded Foxconn. His massive manufacturing plants in China produce countless iPhones, contributing significantly to Foxconn becoming the largest contract electronics manufacturer globally.
No guarantee of safety
A one-hour drive from the financial giant Shanghai lies Kunshan, which has served as a vital center for Taiwanese businesses in China since the 1990s.
"Previously, this area was a rice paddy," reminisces Annie Wang, an industrialist from the island who came to Kunshan in 1996.
"The Taiwanese companies had the good fortune to align with the three decades of China’s most prosperous manufacturing era," she stated.
Currently, Wang leads an electronic components subcontracting production facility, a modest tech park, and a line of coffee accessories.
During the peak of the economic surge, Kunshan reportedly accommodated over 100,000 Taiwanese individuals, as per estimates from local associations.
However, the number of Taiwanese businesses in the city has decreased from over 10,000 a decade ago to less than 5,000 currently, as per the statistics.
Moreover, the Taishang have experienced pressure as ties between Taipei and Beijing reach some of their most strained levels in decades.
The Chinese Communist Party — which asserts that Taiwan is part of its territory despite never having exercised control over it — has become more aggressive towards those labeled as "Taiwanese independence advocates," going so far as to call for capital punishment for individuals accused of separatist activities.
The new regulations, which similarly promote citizens reporting suspected separatist actions, have instilled fear among Taiwanese companies operating in mainland China.
"Due to our uncertainty about ensuring the safety of Taiwanese employees, we have decided against sending them to China," stated industrialist Lee.
"The favorable circumstances at the beginning have vanished, and numerous additional risks have emerged," said Luo Wen-jia, deputy head of the Straits Exchange Foundation, to AFP.
China's economic challenges and increasing manufacturing expenses are exacerbating the issues.
"When we initially visited, we believed that China's economy would keep improving due to its vast marketplace and substantial population," stated Leon Chen, a Taiwanese entrepreneur employed at a battery component plant in the southeast province of Jiangxi.
"However, we have not observed this coming to fruition due to certain concerns — such as the U.S.-China trade dispute and the pandemic," he further explained.
Caught in crossfire
As a result, Taiwanese manufacturers are shifting their focus to newer, more lucrative—and less politically charged—locations.
"Some headed to Vietnam, others to Thailand, Indonesia, and the Philippines, while some came back to Taiwan," Luo stated.
From 2016 to 2024, Taiwanese investments in Vietnam sanctioned by the Ministry of Economic Affairs in Taipei saw an increase of 129%, rising from $451 million to over $1 billion.
During the same timeframe, the numbers heading to mainland China dropped by 62 percent, as per the same source.
This downturn could undermine Beijing's "united front" approach, where they have relied on Taiwanese business communities abroad to advocate for Taiwan's political assimilation and, eventually, reunification.
As Beijing initiates military exercises simulating a blockade of Taiwan and Taipei intensifies efforts against Chinese espionage, Taishang could find itself trapped amid the escalating tensions.
In October 2023, Chinese authorities initiated an investigation into Foxconn, which many observers believe was connected to the company’s founder's pursuit of the Taiwan presidency.
"Although we cannot compare it to its prime, we can still manage financially," stated Chen.
Should the business climate in China continue to deteriorate, we would be forced to depart.
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