The largest external investors into mainland China today are the Taiwanese. The key to understanding the investment opportunity presented by China today is to look at the evolution of Taiwan in the 1980s and 1990s.
In the 1960s and 1970s, the relationship between Taiwan and the US was a textbook First-Third World relationship. US businesses invested in Taiwan to take advantage of its low-wage manufacturing labor. Meanwhile, the best and the brightest Taiwanese engineering students came to the US for graduate education in a classic "brain drain" scenario–after finishing school, most chose to remain in the US to pursue professional opportunities. In fact, Taiwan sent more doctoral candidates in science and engineering to the US during the 1980s than any other country.
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