Rising trade and technology tensions between Washington and Beijing have affected production for Taiwanese companies making goods in China for the US market, the Ministry of Economic Affairs said on Wednesday.
An annual survey conducted by the ministry showed that 25.7 percent of export orders received by Taiwanese manufacturers and rolled out in China and Hong Kong went to the US last year, falling 1.1 percentage points from a year earlier.
The ministry attributed the decline to growing trade disputes and technology competition between the US and China, which prompted many Taiwanese manufacturers with overseas operations to relocate production from China to ameliorate the impact of such tensions.
While Taiwanese firms with production in China and Hong Kong lowered their ratio of production bound for the US market, they sold 22.3 percent of their goods made in China in the same market, according to the survey, which collected 2,768 valid responses.
In terms of industries, electronics component and optoelectronics makers with operations in China sold 53.4 percent and 45.3 percent of their production in the Chinese market respectively, as many in the two industries serve as contract manufacturers, including flat panel makers, for customers in China, the ministry said.
Taiwanese machinery and base metal manufacturers with operations in China shipped more than 40 percent of their products from China to the US market, it said.
Twenty-four percent of respondents sold their products in the markets where the goods were produced last year, the highest since 2010, up 2.5 percentage points from a year earlier.
The increase in selling locally showed that market proximity was more important for Taiwanese exporters, the ministry said.
At the same time, 70.1 percent of products were sold to third markets, down 3.5 percentage points from a year earlier, while the remaining 5.8 percent sold their products back to Taiwan, the survey indicated.
Machinery exporters shipped 83.1 percent of their products, information communication technology exporters shipped 81.6 percent and base metal exporters shipped 77.1 percent to third markets, the ministry said.
Seventy-four percent of survey respondents said they chose Taiwan as the top destination for production expansion last year, accounting for 55.4 percent of companies that expanded capacity last year, in the wake of government tax incentives and efforts to contain COVID-19, followed by 36.5 percent who chose ASEAN members.
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