Speaking at the 2007 Forum on Cross-Strait Industrial Cooperation and Development held in Kunshan, Jiangsu province, Chiang said most Taiwanese investors in China’s coastal areas are facing labor shortage problems.

Chiang noted that Beijing’s economic development policy now places greater emphasis on China’s central, western and northeastern areas and that authorities have become more selective in approving investments from Taiwan.

As a result, Taiwanese businessmen who plan to set up a labor-intensive factory in China’s coastal areas are facing a higher investment threshold and limited maneuvering room, he said.

Chiang added that Taiwanese investors in China are also facing rising production costs and difficulties acquiring materials for their factories. He pointed out that the labor shortage is coupled with the problem of rising wages, with the average monthly wage for a worker in a Taiwanese-invested factory now surpassing US$200.

According to Chiang, Taiwanese investors looking to survive in business are left with two alternatives: moving their production bases to China’s inland areas or to the north, or transforming their businesses to technology-intensive or service industries.

The annual forum, organized by the Kunshan city government and the Association of Taiwan Businessmen in Kunshan, is in its seventh year. More than 300 people, including some 100 academics, industrialists and politicians from Taiwan, are taking part in two days of discussions.

The focus of this year’s forum is outsourcing services and the prospects of the optoelectronics industry.

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