Taiwanese businesses are mulling moving manufacturing operations out of China due to the intensifying trade war between Washington and Beijing, with those in the textile, electronics and bicycle industries most likely to relocate, a survey released by the Industrial Development Bureau found.
The fallout from the US-China trade war would have a minimal effect on Taiwan’s petrochemical, steel and aluminum, and machinery manufacturers, which supply products mainly to China’s domestic markets, but could deal a blow to the textile, electronics and bicycle industries, which export products to the US, the survey said.
To minimize fallout from the trade war, the textile industry, which has established factories in Southeast Asia, is most likely to ramp up production in the region, while the electronics and bicycle industries could move operations back to Taiwan to add to the production facilities they already have in the country, the bureau said.
Some electronics and bicycle manufacturers have restarted their factories in Taiwan, while many others have adopted a wait-and-see attitude, the bureau added.
Statistics from the Investment Commission from January to last month showed that 40 percent of inquiries by Taiwanese businesses about foreign direct investment were related to investment in China, while 60 percent focused on Southeast Asia.
In the past, 60 to 70 percent of such inquiries were related to investment in China, showing a potential shift in Taiwanese businesses investment plans.
Most domestic companies interested in investing in China are eyeing the domestic market there, while most considering relocating are doing so because of the deteriorating operating environment in China, not necessarily due to the fallout from the trade war, commission Executive Secretary Emile Chang (張銘斌) said.
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