Heavy investment in China by Taiwanese businesspeople will have many negative effects on Taiwan in the long run. I will limit my discussion to just two.
First, large amounts of investment in China by Taiwanese means that less money is invested in Taiwan, and this slows down the rate of domestic industrial upgrade. Since the majority of Taiwanese businesspeople can use their existing technologies to manufacture products in China, they have no need to conduct research and development or to invest in Taiwan, nor do they face any immediate pressure to improve the quality of their business operations, which means industrial upgrades here have slowed and will continue to do so.