Local companies and the government should look beyond China when considering corporate investments, a local trade organization said yesterday during the release of its competitiveness study on ASEAN and Indian economies.
The 254-page report by Taiwan Electrical and Electronic Manufacturers’ Associations (電電公會, TEEMA) is the product of its 2,012 surveys of local companies in 11 countries.
The data compiled compared the nations in terms of competitiveness, overall investment environment, investment risk, corporate rating and across four major sectors — fishing/ farming, information technology communication, traditional industry and services.
“Overall, the combined results show Singapore and Brunei as the top two nations best positioned for general foreign investments, while the bottom two are Laos and Myanmar,” Leu Horng-der (呂鴻德), TEEMA’s director at the Center for Global Taiwanese Business Studies, told a media gathering.
Leu, who is also a business professor at Chung Yuan Christian University, said Singapore’s No. 1 ranking was not surprising because the city-state has a highly diversified economy and well-developed legal system.
Brunei came in second because of its highly centralized petroleum and refining industries, he said.
The TEEMA report comes at a time when most Taiwanese companies are eyeing China as their target for major investments. Government data show that more than 60 percent of outbound business investments went to China this year.
“Taiwanese companies have a herd mentality,” Chiang Shi-huang (蔣士煌), deputy director-general of the Bureau of Foreign Trade, told the conference.
Chiang said he hoped that with TEEMA’s report, Taiwanese companies would consider ASEAN countries and India when mapping their foreign investment strategy.
“Although China has a population of 1.3 billion and the internal demand is overwhelming, the combined population of ASEAN plus India is more than 1.7 billion. This is an opportunity that cannot be missed and is the premise behind the research in terms of both potential consumer demand as well as strategic business positioning,” TEEMA said in the report.
The report also showed that in terms of sector ranking, Indonesia’s Batam Island led in fishing and farming, Singapore in information technology communication, Malaysia’s Penang in traditional industry and Singapore in the service industry.
Leu said that when Taiwanese businesses look to investment overseas, they need to weigh the pros and cons of various cities’ public infrastructure, technical expertise, labor force, compensation, the regulatory environment and associated expenses amongst many other factors before setting up operations.
“This seems like a lot of work, we do not recommend putting all your eggs in one basket [China],” he said.