This research is to explore how the Taiwanese manufacturing firms scan the environment and how they make competitive strategies under the much more keen business environment in China. The researcher sent 100 copies of questionnaires to the Taiwanese firms located in Dong Guan of Guan Dong (Canton) Province, 61 valid copies were collected. There are some important findings. We find out that Taiwanese firms are very concern about Chinese Government's policies, especially those of custom and taxation. Concerning competitive strategies, the results indicate five types of competitive strategies: Internal innovation capability, marketing and manufacture capability, low cost capability, quality management capability, and customer service. And environmental scanning behavior will most affect marketing and manufacture capability. Besides, when formulating competitive strategies, corporate size or expectation economy in China will not affect competitive strategies. They are also affected heavily by their past experiences in doing business in China when making the strategies.