Ma is really riding the knife's edge between appeasing the Taiwanese business community that got him elected and not getting Taiwan truly entangled with that monster to its east.

This is something I don't get about the Chinese government. A big chunk of the country is located far inland, requiring road transport, which is prohibitively expensive, given current oil prices. And still they chose to impose all of their diktats, ranging from minimum wage, maximum hours, overtime, the banning of motorcycles from big cities (thereby raising city-dweller living costs), et al. Thailand and Indonesia, both of which used to be more expensive than China in terms of labor costs, are now about the same or cheaper. But Thai and Indonesian real estate and transportation costs are way cheaper. So plants that moved from these countries to China are now moving back - without having the negative stigma of the "Made in China" label. Vietnam, of course, has been cheaper than China since the NVA took Saigon 30 years ago, transforming South Vietnam from the richest country in Southeast Asia to the poorest - such that Vietnam is only now rediscovering the motorcycle and the automobile, which were ubiquitous in South Vietnam before the Communist victory. And the Vietnamese minimum wage is literally less than 1/3 China's minimum wage.

 

The Chinese prohibition of the moving of plant equipment outside the country was tolerable as long as Chinese costs were way lower. Now that they are equal to or higher than those in neighboring countries, investors are probably looking at this as one more reason why China is way too expensive to bother investing in - you have to basically write off your physical plant if you want to move production out of China.