(Bloomberg) — Taiwan sits squarely in the middle of the worsening dispute between Beijing and Washington, with many of its companies operating factories in China manufacturing for American companies.

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Those tensions are pushing Taiwanese companies to relocate some production back home and also redirect money to factories on their side of the strait. Taiwan’s government has helped with tax breaks and other support, and that investment has cushioned some of the blow from the Covid-19 pandemic.

Since January 2019, more than NT$1.1 trillion ($38 billion) of Taiwanese investment has come back, Economic Affairs Minister Wang Mei-hua said Wednesday, with tech manufacturers including Innolux Corp., Accton Technology Corp. and Quanta Computer Inc. building new factories in Taiwan.

Supply chains for electric vehicle manufacturers including Tesla Inc., which has a factory in Shanghai, are also moving to set up in Taiwan, she told members of the American Chamber of Commerce

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