In addition, Japan, China and Hong Kong have emerged as the second, third and fourth major sources of foreign investment globally respectively.
In 2012, they were responsible for US$123 billion, US$84 billion and US$84 billion respectively in foreign investment, although Taiwan benefited very little from this.
The 21 economies most likely to attract foreign investment in the period from this year to 2015 are: China, the US, India, Indonesia, Brazil, Germany, Mexico, Thailand, the UK, Japan, Russia, Vietnam, Australia, Poland, South Africa, Canada, France, Malaysia, Hong Kong, the Philippines and Turkey, in that order.
Taiwan is facing serious competition from emerging economies in Europe, Asia and Latin America in terms of attracting foreign investment, and holding a handful of investment fairs or signing an investment letter of intent or two is likely to fix it.
The jury is still out on whether the free economic pilot zone initiative will actually attract investment.
If the cross-strait trade agreement can exempt chemicals, foods, metals and automobiles from import tariffs, major international manufacturers could be falling over themselves to set up plants in Taiwan to avoid the customs tariffs in China.
Studying foreign investment trends and using this data to inform government policy on attracting such investment, together with the Economic Cooperation Framework Agreement, may give the nation a chance of running with the big boys.
Tu Jenn-hwa is director of the Commerce Development Research Institute’s business development and policy research department.
Translated by Paul Cooper