When Taiwanese entrepreneur Wen Shi-ming first came to do business in China 11 years ago his compatriots thought he was mad.
"People said to me, why do you want to go to a country that is not safe, that is chaotic. Why don't you stay here?" said Wen, who runs a company making waterproof cloth and other textiles for exports.
Now his fellow Taiwanese businessmen are laughing on the other side of their faces, said Wen, who five years ago was one of the first Taiwanese to set up shop in the town of Kunshan, about an hour's drive from Shanghai on China's east coast.
Kunshan has become a haven for Taiwanese business as hundreds of entrepreneurs have fled here in search of cheap labor and lower land costs, after the Taiwanese economy took a battering following the collapse in the global technology bubble.
"There is so much demand for land that the Kunshan government is having to look for space in the surrounding villages," Wen said.
But it is not only small and medium-sized manufacturing businesses from Taiwan that are flocking to China.
Firms from across Asia, ranging from multinationals looking to skim the cream from China's best universities to small-scale manufacturing operations hoping to reduce labor costs have relocated to China in the last 18 months.
And the momentum is going to grow now that China has entered the WTO, said Fraser White, general manager of NCO China.com, a company which aims to simplify the process of setting up in China for incoming firms.
White, a lawyer with years of experience helping big-name multinationals enter the China market explained: "All the multinationals are saying that the worldwide market is depressed and this is the only market that is showing real growth potential over the long term."
While the high-tech boom kept the dollars rolling out of the US there was little need for firms to tackle the headaches involved with doing business in China.
But now with the global economy in the doldrums White saw the perfect time to set up a company aimed at streamlining corporate registration for foreign companies hoping to hop on the China bandwagon.
"There are difficulties which are inherent in coming to China, but what we are trying to do is remove those hurdles so that firms are not spending millions of dollars on legal fees and accountants fees for setting up offices," he said.
Companies which over a decade ago shifted their regional corporate headquarters from Tokyo to Hong Kong are now moving to Shanghai to cut costs and attract a broader pool of talent.
"China has a tremendous advantage because it has an incredibly deep pool of high quality human resources," said Jonathan Woetzel, general manager of corporate finance at McKinsey Co in Shanghai.
"I think Shanghai is well on its way to becoming the capital of North Asia."
Once the city sets up cross-strait flights to Taiwan, Shanghai will become the ideal hub to manage regional business, he said, pointing to the number of firms that have moved headquarters or R&D centers to the city.
Some 42 foreign companies have already set up their regional or global research and development centers in Shanghai, according to statistics from Shanghai Municipal Foreign Investment Commission.
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