Taipei: Taiwanese firms are undertaking a long-term shift away from manufacturing in China, but experts warned Monday that Beijing's political-economic system makes full independence from the mainland's industrial ecosystem a distant goal. At a forum in Taipei Monday night, Wu Jieh-min, a research fellow at Academia Sinica, stated that Taiwanese capital is undergoing a "long-cycle" adjustment, with firms gradually relocating manufacturing out of China in response to rising geopolitical and regulatory risks.

According to Focus Taiwan, Wu said the shift toward Southeast Asia and India allows Taiwan to reposition itself higher up the value chain, focusing on sectors such as artificial intelligence and semiconductors rather than labor-intensive assembly of commoditized goods. Whether Taiwan can turn its current economic momentum into a durable advantage will depend on its ability to secure key production nodes and cooperation networks within an increasingly fragmented global economic order.

However, Patrick McGee, author of Apple in China, cautioned that the idea of a clear "next destination" replacing China is often overstated, citing the Apple supply chain as an example of the limits facing diversification efforts. "I really think there isn't a next destination," McGee said. "China is going to continue to be the next destination." He argued that enthusiasm surrounding India largely reflects the relocation of final assembly, while core engineering capabilities and critical component manufacturing remain concentrated in China. In addition, China's capacity for rapid, system-wide mobilization allows firms to resolve complex technical challenges in ways that are difficult to replicate in countries such as India or Vietnam, he said.

Former WTO Ambassador for Taiwan Cyrus Chu said these constraints reflect a fundamental incompatibility between market economies and China's Leninist political system, under which the ruling party exerts control across society and the economy. In such a system, Chu said, market mechanisms governing competition, trade, and regulation must ultimately serve political objectives, rather than operating independently. As a result, he argued, a fully integrated global trading system cannot function seamlessly across both liberal market economies and Leninist regimes.