Taiwan's inward foreign direct investment (FDI) amounted to a record high of US$7.42 billion last year, ranking sixth in South Asia, East Asia and Southeast Asia, according to the World Investment Report 2007 released on Tuesday.
Taiwan ranked behind only China, Hong Kong, Singapore, India and Thailand in the region in terms of inward forward direct investment, according to the annual report, which was published by the UN Conference on Trade and Development (UNCTAD).
Inward foreign direct investment last year increased 356 percent over 2005's figure of US$1.62 billion and 291 percent over 2004's figure of US$1.89 billion.
Outward foreign direct investment totaled US$7.39 billion last year, ranking the country fifth in the region behind Hong Kong, China, India and Singapore.
The amount marked an increase of 22.74 percent over the figure of US$6.02 billion for 2005 and a 3.56 percent increase from US$7.14 billion in 2004.
Last year the total FDI inflows to South Asia, East Asia and Southeast Asia amounted to a record high of US$200 billion, marking an increase of 19 percent over 2005.
The report shows that Taiwan ranked 119th in the world in terms of the Inward FDI Performance Index for last year, while the country ranked 20th in terms of its Inward FDI Potential Index for 2005 -- the most recent year for which data is available.
Based on these results, Taiwan was placed in the category of "below potential" countries, those that have high FDI potential but low FDI performance.
The Inward FDI Performance Index ranks countries according to the ratio of a country's share of global FDI inflows to its share of global GDP.
The Inward FDI Potential Index is an average of the values of 12 variables expected to affect an economy's attractiveness to foreign investors.
A senior UNCTAD economist told the Central News Agency that "below potential" countries tend to be less dependent on FDI inflows in pursuing their development goals.
For example, the US saw its Inward FDI Performance Index ranking somewhere around 120th for three consecutive years to last year, although it maintained its top position in terms of its Inward FDI Potential Index for 2004 and 2005, the economist said.
He noted that Taiwan's Outward FDI Performance Index ranked 27th, 27th and 26th, respectively, for the three years between 2004 to last year, which may indicate that Taiwan and its businesses tend to rely on outward FDI to enhance their international competitiveness.
Similarly, France ranked 87th, 78th and 74th respectively, for the same three years, while the country's Outward FDI Performance Index ranked 19th, 16th and 17th over those years, he said.