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Taiwanese firms losing big in China, new report shows

About 40 percent of the Taiwanese companies that responded to a government survey released yesterday said they have lost money in China.

The survey, conducted by Taiwan's Investment Commission, is the first official glance at the success of Taiwanese businesses in China -- where companies may have invested up to US$60 billion over the past decade.

About 46 percent of the businesses that responded said they turned a profit in China in 1999, but 41.7 percent said they had lost money. Survey data has yet to be collected for 2000.

The survey was sent out randomly to 13,038 companies investing in China, Only 1,644 -- or 12 percent -- replied.

The low response rate might be due to a common reluctance of Taiwanese businesses to share information about their China investments. Many firms do not comply with Taiwanese laws regulating trade on the mainland.

Most of the respondents included companies with electronics, metal, chemical and nylon factories in southern China, a survey statement said.

While the media have widely reported an exodus of local businesses to China's big business centers -- like Shanghai and Guangdong -- the survey showed that many companies are keeping their main operations in Taiwan.

According to the survey, 76 percent of companies have kept their head offices in Taiwan, but 20 percent have downscaled and 3 percent have stopped operations.

A majority of companies, 44 percent, still receive financial support from their head offices in Taiwan and from Taiwanese banks. Only 20.54 percent have been granted loans in China.
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