The Mainland China was the largest market, accounted for 56%, twice doubling the next country, the Indonesia, at 14%. The Thailand was a few points lower, at 11%. Following closely was the Malaysia, at 9.5%. The next country, the Vietnam, accounted for 6% of the whole. Finally, the rest of the Singapore and the Philippines had the lowest percentage of the whole at 2% and 1.5% respectively.

Beginning in 1990, the Taiwanese Government began to relax the rules of indirect investment and trade with Mainland China. Investment in the Mainland China by Taiwanese companies increased sharply, until it accounted for about more than half of all Taiwanese investment abroad. The Taiwanese government worried about that the situation might create influence form the China government. As a result, the Taiwanese government produced a formal platform to encourage the Taiwanese companies to go into Southeast Asia.

In the previous decade, when the Taiwanese dollar’s value increased sharply, many firms began to move abroad. It was also just the time that countries of Southeast Asia were opining their economies to foreign investment. As the international and domestic environment had changed, the expect ions of Taiwan by Southeast Asia countries had fallen gradually. Due to a better investment environment and entire devotion of economic development in China, the Taiwanese investors began to focus on the Chinese market and reduced the willingness to invest in Southeast Asia.

The Taiwanese investors had their own views about advantages or disadvantages of both markets but the Taiwanese government concerned about another problem that within a few years the China companies have copied the products and become their competitors. In contrast, this problem was not as big in China as in Southeast Asia. Although Mainland China’s cheap labor and large domestic market is attracting the Taiwanese firms rapidly, the Taiwanese investors have to think about the essential problem to be left after firms going abroad.

August 2002