While the politicians argue, the companies are plowing ahead. Compal, Arima and First International have opened factories to assemble laptop computers near Shanghai. To avoid breaking the rules, they say they are making components, rather than assembling entire machines. But executives said at least two companies were already producing complete laptops in China. Acer Inc. Mr. Hsu noted that Taiwan companies have already set up offshore companies to make their investments in China.
Taiwanese officials acknowledge it is impossible to reverse the tide.
They say their goal is to pace the transfer of technology to China so that Taiwan retains a viable industry of its own. Among the technologies they are encouraging are flat-screen monitors and mobile communications. If the notebook producers move out too fast, and the suppliers follow them, it will hurt the development of higher-end industries. The trouble is, Taiwan is no longer such an alluring place to do business. Land is scarce and expensive.