But the trade delegation whose buying power attracted the most attention was from China, which until recently had long been considered a technology backwater. Over the past decade, Taiwanese firms have set up assembly lines in China to turn out personal computers and spare parts, taking advantage of the mainland's cheap manpower. About 70 percent of the products were produced by Taiwanese-invested firms on the mainland. China's computer output, behind the United States and Japan, marked an impressive 38 percent growth. The Chinese delegates to the weeklong trade show, including executives from its two largest computer firms, were shopping for laptops, hand-held computers and advanced motherboards not yet produced in China.
Taiwanese makers have a leading edge in research and development and chipset design.
The Chinese orders are highly valued as Taiwanese firms struggled with sagging demand from the West amid the global economic slowdown. But there is a catch behind the luring business. Taiwanese officials fear their companies may be helping their historic rival so much that China could build a computer industry to replace Taiwan's in a few years. Our biggest challenge is how to strike a balance in our strategies. Several company officials at the trade show dismissed the concerns as unwarranted.