Chinese tech firms, squeezed in Taiwan over politics, look to expand farther offshore

“Economic issues are the most practical,” he added.

Micronet Union was one of 83 mainland exhibitors among the 1,000-plus total at Computex, which was attended by tech heavyweights such as NVIDIA founder Jensen Huang. The number of mainland exhibitors, however, was down sharply from 297 that attended the most recent fully in-person show in 2019.

Politically at odds, Taiwan has cut off formal dialogue with mainland China for seven years, and the two sides are allowing little travel, making it hard for on-site business exchanges. And as a result, mainland entrepreneurs are looking to the broader world market, even as they maintain a presence in Taipei.

Beijing sees self-ruled Taiwan as a breakaway province that needs to be reunited with the mainland, by force, if necessary. Tensions have shot up since a visit to the island by then-US House speaker Nancy Pelosi, which sparked mainland military drills near the island.

In the US, a staunch informal supporter of Taiwan, officials have barred transfers of high-end technology to China while courting investment from the Taiwanese tech sector that is known for advanced chips and makes up about 30 per cent of the economy.

Direct investments from the mainland in Taiwan fell from a historic high of US$349.5 million in 2013 to US$38.7 million last year, according to Taiwan Investment Commission data. Monthly trade data has also shown a steady decline in Taiwanese exports to the mainland.

Many mainland entrepreneurs are probably avoiding Taiwan, whether at Computex or at other venues, because they would find it “kind of weird” and “not so welcoming”, said Chen Yi-fan, an assistant professor of diplomacy and international relations at Tamkang University near Taipei.

Visas are hard to get for Taiwan, the professor said, even if events such as Computex allow mainland participation.

“It’s not just access,” said Joanna Lei, chief executive of the Chunghua 21st Century think tank in Taiwan, pointing to cross-strait tensions. “If I were a business leader, I wouldn’t come … I’d be worried for my safety.”

Some exhibitors sent local Taiwanese representatives to the show instead of trying to fly people in from the mainland.

Taiwanese and mainland firms still do business in tech manufacturing and R&D, Lei said, but they meet online or in third locations such as Singapore to reach deals. Taiwanese firms and trade groups still attend business forums in the mainland, she added.

Other mainland exhibitors said they came to this week’s Computex to scout for customers farther offshore than in Taiwan. Most are smaller to medium-sized developers of components for tech hardware.

Citaq, a Shantou-based maker of retail point-of-service hardware, got drop-ins from Western countries and India at its small Computex show space, according to overseas sales director Chen Fangkuang. He said the idea was to find clients, and politics had not come up.

“The people here are friendly,” the sales director said. “They’re just here to talk about tech hardware.”