Taiwanese enterprises have struggled for years to enter China, but now, just when access to the Chinese market is becoming easier than ever, many are paradoxically heading back to their home country.
One of them is Taipei-based restaurant giant Namchow Group (南僑集團), which was a relative late-comer in China, but is an early bird in the reverse drive back across the Taiwan Strait.
“Taiwanese people’s income is higher,” said Alfred Chen (陳飛龍), chairman of the group, which derived about half of last year’s NT$9.6 billion (US$325 million) in revenues from Taiwan.
“Besides, local consumers provide us with valuable experience regarding emerging consumption habits,” added Chen, whose company is maintaining its China operations while boosting those at home.
Chen is building a culinary empire in Taiwan centered around a German and a Chinese restaurant chain, plus he is planning to modernize his edible oil and fats plants in Taiwan at a cost of NT$500 million.
Cheng Shin Rubber Industries (正新橡膠), a tire maker with plants in China, Vietnam and Thailand, -invested NT$10 billion at home last year to boost its local capacity and plans to spend another NT$20 billion over the next two years.
“The investments are aimed to boost the manufacturing capacity of our high-price items,” company spokesman Wu Hsuan-miao (吳軒妙) said.
This appears to be the beginning of a broader trend. Taiwanese companies with a majority of their business in China invested NT$40.9 billion at home last year, a tripling of the figure in 2007.
“There are signs that such investments are on the rise,” said Tristan Lu of the Taiwan Institute of Economic Research (台灣經濟研究院), a private think-tank based in Taipei.
It is somewhat ironic that this should happen now, at a juncture in history when China and Taiwan are getting friendlier than ever and have started removing many of the remaining obstacles to business.
When Taiwanese companies started funneling funds out of the country in the 1980s, they were attracted by China’s cheap labor and land prices, but they acted without government permission.
Since then, however, they have got the official stamp of approval and President Ma Ying-jeou’s (馬英九) administration is promoting -economic exchanges more -actively than ever.
China does still attract large Taiwanese funds, with enterprises from Taiwan investing US$6.7 billion in China last year, according to the Chinese Ministry of Commerce.
However, at the same time, China’s investment climate has changed dramatically, investors say, as skyrocketing labor costs, a new business income tax and a more cumbersome labor contract law combine to sour the outlook.
“Lots of Taiwan-invested companies have been forced to close their plants there,” said Ling Chia-yu (凌家裕), the head of the Ministry of Economic Affairs’ Department of Investment.
However, Taiwan-invested companies that are getting less -enthusiastic about China may find that returning home is not a solution to their woes, analysts said.
“Those companies, mostly small ones without competitiveness, won’t be able to survive in Taiwan even if they come back,” said Tung Chen-yuan (童振源), an expert on China-Taiwan economic ties at National Chengchi University.
“Their only chance is if they can upgrade their industrial technologies, but that might be very hard considering their modest scale,” he said.
So most of them have either moved to Southeast Asia or provinces in western China where labor cost is cheaper, he said.
Other investment barriers are the decades-old restrictions that have barred Taiwan from further liberalization and internationalization, Tung said.
“Poor,” Chen said when asked to comment on Taiwan’s investment environment. “There is much the government needs to do.”
This was disputed by government officials, who argued the government has provided a full range of benefits to potential investors coming back from China. They include tax reductions, loans and assistance in the acquisition of land, the officials said.
IN GOOD FAITH: Lai said he appreciates Micron’s commitment to Taiwan and that it would continue expanding its investment in the country, while also working with labor President William Lai (賴清德) yesterday called for US memory maker Micron Technology Inc and its workers to negotiate “sincerely” ahead of a possible strike by the company’s union in Taiwan. Last week, a Taiwanese union representing workers at Micron said it had secured authorization from its members to strike over a dispute concerning the company’s bonus scheme, escalating a labor conflict at the chipmaker’s largest manufacturing hub. Micron employs about 15,000 people in Taiwan and has said it invested more than NT$1.6 trillion (US$49.6 billion) in the country. Speaking in Taichung at the opening of a new Micron advanced assembly and testing facility,
China proposed adding advanced artificial intelligence (AI) technologies to its export-control list, potentially restricting overseas transfers of AI models and chip designs in an effort to keep closer control over homegrown advancements in a strategically important sector. The draft proposal covers 23 AI technologies, including large language models, agents, chip designs and computing clusters. Restricted technologies would include model weights and source code for products exceeding certain performance thresholds. Chinese AI startups have this summer made significant progress in closing the gap on US industry leaders. Models such as Moonshot (月之暗面) AI’s Kimi K3 and DeepSeek’s (深度求索) latest editions offer better pricing,
Taiwan should not rule out any energy source or abandon environmental sustainability in favor of ideology and short-term benefits, President William Lai (賴清德) said in an interview, calling for a “professional assessment” of whether nuclear power should be reintroduced into Taiwan’s energy mix. In an online interview with influencer Yu Ting-hao (游庭皓) that aired yesterday, Lai reiterated his position on nuclear power. SHIFT Lai’s remarks marked a shift from the Democratic Progressive Party’s (DPP’s) longstanding opposition to nuclear power. As premier from 2017 to 2019, Lai pushed for more gas-fired power capacity while sticking to the DPP’s nuclear free homeland ideology and rejected the
JUST FOR SHOW: The new-generation sports car, which would not begin production until 2028, finally gives Tesla a showpiece after years of missed Roadster deadlines Tesla unveiled a redesigned Roadster powered with rocket-style thrusters on Thursday and said it would start production in 2028, more than a decade after it first showed a next-generation version of its electric sports car. The white two-seater vehicle, developed in collaboration with CEO Elon Musk’s rocket company SpaceX, drove upside down on a ramp using a suction system, turned in the air and landed using built-in thrusters. Later in the event it used the thrusters to jump over a truck and other vehicles, twisting in the air during the maneuver. Some watchers saw the collaboration as Musk drumming up interest in
RSS