How to make money from China, Taiwanese-style

Firms were quick to seize their chances when China finally opened up

After defeat at the hands of the Communists in China’s civil war in 1949, the Nationalist forces of Chiang Kai-shek fled to Taiwan.

They lived with the constant threat of invasion through the Chairman Mao years. But despite that history of enmity, Taiwanese firms were quick to seize the economic opportunity presented by cheap mainland labour when China finally opened up 30 years ago. The Taiwanese leveraged their linguistic ties and opened factories on the mainland. And now, in the wake of a landmark 2010 trade deal with Beijing, some smart Taiwanese firms are in a good position to sell to the mainland Chinese consumer.

Apixia is a firm that manufactures digital dental imaging hardware, which is cheaper and more convenient than the clunky old X-ray machines. They see big opportunities from selling into mainland China. “There are 60,000 licensed dentists in China today but they will have 450,000 in 10 years,” says chief executive Douglas Huang.

Taiwanese firms also have a strategy to deal with China’s rampant piracy: ignore it and focus instead on quality. Ozaki is a firm that manufactures innovative cases for iPads and other accessories for Apple products. “[Chinese piracy] is impossible to stop,” says Ozaki’s boss and founder, Freeman Liu. “The fakers are very, very small. When you catch them you can’t find the boss. So we focus on creation instead.”

It’s a message echoed by Papago!, a manufacturer of sleek video cameras for car dashboards which are designed to help drivers prove they were not responsible in accidents. They face a market of cheaper replicas in China. “We can’t compete on price so we try to offer something more to customers,” says spokesman Rex Hou.

Taiwan is also reaping the benefits of tourism from mainland China. “Most of the boutiques in Xinyi [the financial district] would not be here if not for mainland Chinese tourists,” remarks one local with a smile.

For many Taiwanese, business will always come before politics.