Minister of Economic Affairs Shen Jong-chin (沈榮津) yesterday expressed confidence in local companies’ continued investments in the nation after the US and China on Friday agreed on a “phase one” trade deal.
“While the US has agreed to reduce tariffs on US$120 billion out of US$300 billion [of Chinese imports] from 15 percent to 7.5 percent, previously imposed tariffs of US$50 billion and US$200 billion are still in place,” Shen told reporters on the sidelines of an investment forum in Taipei.
Therefore, the effects of the US-China trade dispute on Taiwanese businesses remain undiminished, he said.
“Taiwanese companies have realized the importance of globalizing their production sites and target markets,” he said, adding that they would proceed with their relocation plans regardless of reductions in US tariffs.
“I feel like this [the US-China trade spat] provides Taiwanese companies with a great opportunity to reorganize and retrace their footprints from China to Southeast Asia and Taiwan,” Shen said.
Asked whether the rate at which Taiwanese companies are returning home would decelerate, Shen said that trust between firms on matters related to information security is of utmost importance, which has spurred international clients to demand that their Taiwanese suppliers move their advanced production lines home.
The ministry has this year seen more than NT$833 billion (US$27.53 billion) of investment from Taiwanese firms through three government programs, Shen said.
Most of the returning companies are focused on information and communications technology, network and telecommunications, and bicycle industries, he said.
The ministry expects about NT$200 billion of investments to be confirmed by the end of this year, he said, adding that another NT$200 billion is expected to next year.
“We expect all investments to materialize within three to four years,” Shen said.
To address industry concerns over an apparent shortage of workers in Taiwan, the Ministry of Labor has allowed local companies to hire contract foreign workers on a temporary basis, he said.
Furthermore, the interest rate for loans to small and medium-sized enterprises (SMEs) has been reduced by half to 1.5 percent based on the government’s SME investment program, Shen told an event held by the Taipei Computer Association.
As SMEs have pledged to invest more than NT$38.4 billion locally, the Executive Yuan has increased the initial loan amount five-fold to NT$100 billion to further accommodate and encourage investments by SMEs, he said.
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