The country may have a good chance of welcoming Taiwanese businesspeople based in China back home this year as a result of rising investment risks in the communist country. These risks are derived from China's worsening energy shortage and its macro-economic control policy, industrialists and academics said yesterday.
"The government has been keen to encourage Taiwanese businesses in China to return, and this is the best opportunity ever," Leu Horng-der (
"In fact, this is happening, so the authorities should aggressively improve their investment environment and policy to convince more businesses to come back," Leu said.
Leu made the remarks at the release of his annual report on the investment environment and risks in China. He compiles the report on behalf of the Taiwan Electrical and Electronic Manufacturers Association (
The association, with some 4,100 members, has published the report for the past five years as a reference tool for local business groups that have investments in China, or are planning to enter the market.
The latest report is based on a survey conducted in the first half of the year among Taiwanese businesses with branches in China. The survey quizzed companies about seven investment conditions there, including infrastructure, natural resources and the legal system.
"The `go west' trend is irreversible, so companies should be more aware of risk management when making inroads into the world's largest market," the association's chairman Rock Hsu (
Despite their deteriorating power supply, public security and financial and legal systems, first-tier cities such as Shanghai, Beijing and Guangzhou were still considered to have the highest levels of competitiveness in China, the report said.
Cities south of the Yangtze River and along China's east coast, including Xuzhou and Yangzhou in Jiangsu Province and Hangzhou and Xiaoshan in Zhejiang Province, were rated as the places with the lowest investment risk, according to the report.
But investors don't recommend Dongguan in Guangdong Province, where many foreign companies have set up shop over the last decade. Coastal cities like Huizhou in Guangdong Province and Taichou in Jiangsu Province were also rated poorly.
As many Taiwanese and foreign companies are starting to target China's huge domestic demand, rather than viewing it as a manufacturing-for-export base, Leu said that the risk pointed out by investors would slow down the pace of relocation across the Strait, but not halt it.
In addition, following labor-intensive and low-end operation in the high-tech industry, high-end and high added-value manufacturers are starting to show an interest in moving to China, which could present a hidden crisis for Taiwan's competitiveness, according to the report.
Another concern is the nation's export sector, because Taiwanese companies tend to source products from China, thereby reducing their dependence on Taiwan, the report said.
To avoid being marginalized by the trend, the report suggested that the government advance industry innovation and R&D capabilities while stabilizing the cross-strait relationship and gradually liberalizing direct transportation across the Strait.
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