Overseas Taiwanese corporations invested NT$46.9 billion (US$1.57 billion) in Taiwan last year, up 15 percent from a year ago, helped by the implementation of the Economic Cooperation Framework Agreement (ECFA) with China, the Ministry of Economic Affairs said.
Total investment surpassed the target of NT$45 billion for last year, the ministry said in a statement dated Jan. 20.
About two-thirds of the investors were overseas Taiwanese manufacturing firms, with companies in the electronic components and basic metals sectors setting the pace, bringing those sectors’ total investment to NT$35.8 billion last year, the ministry said.
There were also 17 investment projects belonging to overseas Taiwanese-funded companies in the service sector, with total investment standing at NT$9.7 billion last year.
“Many overseas Taiwanese-funded firms decided to invest back in Taiwan because the ECFA’s early harvest list meant they benefited from preferential tariffs first and it created more business opportunities for them,” the ministry said in the statement, adding that machinery tool maker Fair Friend Enterprise Group (友嘉集團) and specialty chemicals maker Swancor Industrial Co (上緯企業) both returned to invest in the nation because of the ECFA.
The ministry forecast that more overseas Taiwanese companies would invest in the future, as a total of 526 items on the early harvest list — 94.5 percent of the items — are subject to free tariffs this year, down from between 5 percent and 15 percent tariffs.
Major beneficiaries would be companies in the petrochemical, textile, transportation equipment and machinery sectors, it said.
Huang Ji-shih (黃吉實), director-general of the ministry’s statistics department, said the additional free-tariff items would also drive up Taiwan’s industrial output.
In addition, the nation’s ability in technology research and development was another reason driving overseas Taiwanese companies to invest, the ministry said.
Meanwhile, industrial policy would also be a major factor supporting investment by overseas Taiwanese-funded enterprises, it said, adding that the government’s policies — in six emerging industries, four major intelligence industries and 10 major service industries — would also attract investments by overseas Taiwanese-funded firms.
China imported US$114.16 billion of products made by Taiwanese companies in the first 11 months of last year, up 8.66 percent from the same period of 2010, the Mainland Affairs Council said in a separate press release issued yesterday. The council did not provide comparative figures.
The council contributed the growth to the ECFA as more locally-made products were exempted from traiffs in China.
US$114 million of products made by local firms were exported to China with zero tariffs last year, the council said.
Additional reporting by Lisa Wang