Wed, Oct 18, 2017 - Page 12 News List

Taiwanese firms should spread efforts regionally

By Ted Chen  /  Staff reporter

As Taiwanese businesses continue to diversify from China to Southeast Asia, they would benefit from spreading their efforts across the region, instead of just concentrated on Singapore and Vietnam, DBS Bank said yesterday.

“There is still a lot of room for Taiwanese businesses to expand in the region while leveraging their advantages and expertise in the manufacturing and service industries,” Ma Tieying (馬鐵英), a Singapore-based economist at DBS Bank Ltd (星展銀行), told a news conference in Taipei.

As local companies heed the government’s New Southbound Policy, trade with ASEAN in the first half of this year rose 55 percent annually to US$1.4 billion, topping trade growth in all other regions, Ma said.

The number of ASEAN tourists visiting Taiwan has risen by 40 percent annually and the region could overtake Japan as the largest source of the nation’s tourism revenue by the end of this year, Ma added.

Between 2010 and last year, Singapore accounted for 42 percent of the nation’s outbound investments in Southeast Asia, with Vietnam making up 37 percent, Ma said, adding that Singapore and Vietnam accounted for 31 percent and 16 percent of Taiwan’s trade with the region, respectively.

That is still vastly lower than China, which accounted for 62 percent of Taiwan’s outbound investments over the past seven years, while China and Hong Kong accounted for 31 percent of international trade last year, Ma said.

During the same period, ASEAN accounted for 13 percent of Taiwan’s total outbound investments and 15 percent of total international trade, Ma said.

However, Vietnam’s advantage of having a large working-age population is quickly fading, compared with other ASEAN members such as Indonesia and the Philippines, Ma said.

Vietnam is also facing challenges from increasing currency volatility, as its central bank is expected to continue interest rate cuts, he said.

As for Singapore, growth prospects are limited by a smaller population and slow labor expansion, similar to other mature markets, Ma said.

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