Although the government has been encouraging companies in the industrial sector to diversify their investments to avoid exposure to risks, manufacturers are still concentrating their investment on China, according to a survey released by the Ministry of Economic Affairs yesterday.
The survey was conducted among 2,460 manufacturers from April to June this year. The poll received 1,880 valid responses.
The results showed that 76.7 percent of local manufacturers have investments in China, down slightly from 77.75 percent last year. The US is the second favorite destination with 18.3 percent, up from 15.93 percent last year, followed by the five countries in the Association of Southeast Asian Nations (ASEAN) with 16.75 percent.
Motives for investing in China include its market potential and cheap labor, according to the survey.
The ministry said confidence in the local business environment is improving, as only 22 percent of the respondents said they turned to China because of a deteriorating environment in Taiwan, down from 28.5 percent last year and 36.1 percent in 2002.
Although manufacturers have moved some of their operations to other countries, they still keep their high-end facilities or those with higher added value in Taiwan, the study found. This has generally helped manufacturers to increase their product line and production figures, according to the survey.