Abstract
This study examines the process and consequences of moving inland for Taiwanese small and medium enterprises in coastal China. Since the mid-2000s, as wages in the booming coastal cities have continued to rise, Taiwanese manufacturers started to build new branch factories in inland areas, or simply relocated their production into the interior where labor was thought to be ample and cheap. However, soon the firms moving inland found that skilled and well-disciplined workers were always in short supply. There was also a high uncertainty of workers’ attendance during the busy farming season. Workers working in their home-town firms actually identified themselves as peasants and assumed farming as their priority, even if its marginal benefits were much less than the wages earned from the factory. They were embedded in social networks in the local society and felt comfortable to file complaints with local government or to quarrel with their employer if the factory did something that violated their interests. As a result, Taiwanese firms used dispatched workers, outsourced or subcontracted its manufacturing orders to outside production sites, which led to different labor institutions in inland China.