Still, China is now the biggest market for everything from cellular phones to chickens. By some estimates, China now accounts for 50 percent of all foreign direct investment in Asia outside Japan, up from 20 percent in the early 1990s.
Taiwan's investment during the past decade can't be discounted: it totals US$100 billion, making it China's fifth-biggest direct investor, according to CLSA Emerging Markets.
More companies are likely to flock to a nation where average wages in Jiangsu Province, for example, are one-sixteenth of factory wages in Taiwan and where workers lack any organized labor union.
"Taiwan will have to open itself to China or run the risk or being marginalized," said Tim Li (
"The migration of Taiwan companies to China is an unstoppable trend," said Li, who runs Quanta's Shanghai-based China unit.
In Taiwan, meantime, some analysts blame President Chen, whose party long advocated independence, for unwittingly playing into China's hands by failing to spur economic growth.
"Many people elected President Chen in the hope he would hold up Taiwan's independent status," said Vickie Hsieh, chief economist at President Securities Corp (統一證券) in Taipei. But he is pushing Taiwan towards China's arms by messing up the economy."
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