China's investment environment has improved slightly over the past year, as living standards and judicial systems have progressed, according to a survey of Taiwanese businesspeople released yesterday.
"Compared to last year, this has been a better year for Taiwanese companies to invest in China," Leu Horng-der (
Increased market visibility, improvements in the judicial system and rising living standards have further benefited Taiwanese investors across the Strait, he said, adding that enterprises around the globe have also been pumping investment into China.
Shanghai, Guangzhou, Beijing, Tianjin and Shenzhen remain the most competitive cities in China, Leu said, citing a report he commissioned for the Taiwan Electrical and Electronic Manufacturers Association (TEEMA,
The annual survey, which is in its sixth year this year, is intended to serve as a reference tool for local business groups that have investments in China, or are planning to enter the market. The survey polled 2,073 Taiwanese companies that do business in China,
Respondents recommended the Minhang area of Shanghai, Hangzhou's Xiaoshan district and Suzhou's Kunshan as the top three investment destinations, the report said.
Though shortages of water and electricity have long plagued Taiwanese doing business in China, Shanghai is not affected by this and offers an open economy, making it one of the most ideal investment destinations in China, Leu said.
Of the top 18 destinations recommended by those surveyed, 10 are in provinces along the eastern coast of China. The region, which has taken over from the northern coast as the most competitive region in China, has a better financial and investment environment, the survey said.
Dongguan earned the dubious honor of being named the worst investment destination, because of the loose enforcement of regulations in the business sector, Leu said.
To ensure success in China's huge market, local businesses should consider human resources as their most basic, yet critical, asset, TEEMA chairman Rock Hsu (許勝雄) said.
They should also evaluate whether available logistics and customs clearance services run smoothly, he said.
The revaluation of the Chinese yuan will eat into Taiwanese companies' profits, said Chen Miao (
If the currency continues to rise -- as many research institutions expect it will -- smaller Taiwanese companies may move their factories to other Southeast Asian countries, such as Vietnam, where labor and raw materials are cheaper, Chen said.
Taiwanese investment in China reached US$43.88 billion as of June, accounting for 50.4 percent of overseas investment this year, according to the Ministry of Economic Affairs.
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