Taiwanese Go South

Stan Shih, chairman of the Acer Group, Taiwan's premier personal computer maker, is less concerned these days about rapidly expanding his company's production in China. Frustrated by slow-moving Chinese bureaucrats, Shih is moving production from high-cost Taiwan to cheaper neighbors in Southeast Asia. Acer earlier this year, for example, signed a deal to produce motherboards at the former U.S. military base at Subic Bay--and began production at the Philippine site just 57 days later. "In Southeast Asia, it's very easy," says Shih. "You can make a decision, ramp up--and you're in business."

A wave of Taiwanese investment is spreading across Southeast Asia. Drawn by cheaper labor, growing markets, and attractive government policies, companies from Taiwan have invested over $25 billion in the seven countries of the Association of Southeast Asian Nations (ASEAN)--about equal to the island's investment in China. Taiwan has emerged as one of the top three foreign investors in the Philippines, Malaysia, and Vietnam. And Taiwanese are moving from labor-intensive industries into areas ranging from high tech to finance.