Discussing Of The Entry Modes And Ownership Strategies Of Taiwanese Enterprises At China

After been under separately governed at the two-straits for nearly thirty some years, Taiwanese government broke the barrier by announcing the opening of relative visits in 1978 but direct interactions are still forbidden. Seeking to survive by overcoming the gradually increasing internal difficulties such as the upsurge of wages, the rise of real estate prices, the shortages of labor, and the revaluation of the Taiwanese currency, many Taiwanese traditional businesses disregarded the risk of being charged with illegal migration and continued to invest overseas to make China the dominant foreign investment. The Taiwanese officials not only refused to encourage mainland investment but they also amended the laws, from a political aspect, concerning the interactions between Taiwan and China as to suppress for further communication. However on the other hand, Taiwanese enterprises' act on the contrary as an individual person then as a Corporation and finally the whole production chains to migrate to mainland China. What were the reasons for those politically sensitive Taiwanese enterprises are willing to handshake "Motherland" and neglecting the "advice" from Taiwanese government?I have conducted my research through the methods of investigations, observations, and case studies. To analyze entry modes and ownership strategies of Taiwanese enterprises', I examined the data using "Analytic Hierarchy Process" to extract the reasons why Taiwanese enterprises favor Mainland China. I have found the cheaper labors, lower rental of lands & factories, and preferential taxes are all the attempting factors in early stage. Gradually to concentrate on internal market and acquire more qualified and economical workers populate the Chinese market for business to enhance in Research and Development fields. Nevertheless, I have discovered for special backgrounds some are simply following the trend and some using China to evade their crime penalties. For entry modes, there were few different ways. From using as an individual, an offshore company not to submit the application for approval to Taiwanese government gradually to using the parent company or an affiliate offshore company mixed with either to submit or not to submit the application ways for approval from the Taiwanese government. As for ownership strategies, in early stage Taiwanese enterprises embarked on the artificial exports industry in Dong-Guan using a simple and common business stratagem called "Processing Trade". After advanced gradually to an international market & internal market at China, this certain type of business model did not satisfy the Taiwanese enterprises and most of them were chosen to change to "wholly venture" or "Join Venture" modes. Many of Taiwanese enterprises who are banned to invest because of foreign identities werechosen using local person as "head" to form proprietor and company. In the process of investing, the accumulated experiences, the amendments made in Taiwan and China as well as the international economic changes has all influenced the investment modes and ownership strategies of Taiwanese enterprises. Hence, the conclusions drawn from my research was based on a particular time period is just for reference only. The identities of Taiwanese enterprises were out of control and the investment areas were spread all over China, therefore, there was a room left for further investigation by future researchers.