Within two weeks, Deng said, Taiwan will relax its restrictions on trade with China to allow cargo shipped from the south China city of Xiamen to be unloaded in southern Taiwan, transferred to Taipei airport, and exported to the US or Europe by plane.
The rules are aimed at foreign computer companies, which use air shipments for components that are needed quickly in their home markets. Deng said routing air cargo through Taipei instead of Chinese airports would save two days.
Direct flights are a thornier issue, he said, because they involve granting landing rights to flag carriers.
Dell executives show little patience for the diplomatic nuances. They are laboring in a fiercely competitive industry, during an economic downturn, when extracting the lowest prices from contractors is critical.
"Nobody talks about communism versus capitalism," Tsiang of First International Computer said. "They just think of where they can get the lowest cost."
The risk for Taiwan, he said, is that it will lose not just low-end manufacturing, which is gravitating toward the cheap labor market in China, but research and development. Companies might prefer to keep such operations on Taiwan, but their bosses are put off by the roundabout trip across the Taiwan Strait.
Shanks of Dell would not say how much of the company's manufacturing is done in Chinese factories. But companies like First International are building plants near Shanghai to produce laptop computers. Already, the bulk of scanners, and half the disk drives, sold by Taiwan companies are made in China.
"We're migrating more and more to China," Shanks said. "The soft economy may be accelerating that."
Dell's decision to put its procurement headquarters in Hong Kong is a little triumph for the city, a special administrative region of China and until 1997 a British crown colony. But it may be a fleeting one. Shanks said that Dell had set up offices in other cities, including Shanghai, where much of the investment in technology is flowing. As Shanghai becomes even more of a technology magnet, Shanks said he could foresee relocating from Hong Kong.
"This is business, so we don't let emotion get in the way," he said.
RSS