Notebook manufacturing is rapidly migrating to mainland China, a move that will inevitably lead to lower laptop prices.

Migration will lead to lower manufacturing costs and, inevitably, to lower notebook prices.

Now let's see if American consumer groups protest that the notebooks are too cheap.

"Land is cheaper, the cost of doing business is cheaper," said Gartner analyst Todd Kort. Other factors, of course, will contribute to lower notebook prices, including increased capacity worldwide in monitor manufacturing.

Labor is also cheaper in China. Monthly wages for a factory employee are roughly $650 less in China than in Taiwan, said Victor Tsan, director of the Institute for Information Industry, a Taiwanese analysis firm associated with the government.

The push toward China comes from both necessity and opportunity. China is rapidly taking over PC and electronics manufacturing, which has been a mainstay of the Taiwanese economy.

But this doesn't mean that Taiwan will come out the loser.

Rather than fight the trend, Taiwanese companies are increasingly emphasizing product design, inventory management, software-hardware integration and other professional services.

In this scenario, U.S. PC companies will largely become marketing and sales organizations, while Taiwanese companies will handle logistics, operations and engineering. They will also manage manufacturing in China.

The sticking point, however, is China itself. Although war is unlikely, many fear that the government will impose onerous or arbitrary regulations.

Although I saw an article in last week's Far Eastern Economic Review that pointed out that with the reforms that China's going to have to undertake for its pension system, it's going to have to
develop its capital markets, making its stock market less of a casino but one that can support long-term institutional investors.