The majority of Taiwanese companies are upbeat about business in ASEAN economies and plan to boost their investment there in the next three to five years, Standard Chartered Bank (Taiwan) Ltd (渣打國際商業銀行) said yesterday.
Citing a survey of 44 local companies it conducted in April, the bank said in a report that 95 percent of the firms polled expected revenue to grow in ASEAN member states, with 59 percent predicting growth of 10 to 20 percent over the next 12 months, and 14 percent expecting growth of more than 20 percent.
Ninety-three percent expected their annual production in ASEAN members to increase, while 91 percent said they planned to increase their investment by at least 25 percent in the next three to five years once the Regional Comprehensive Economic Partnership (RCEP) takes effect.
Photo: Lee Chin-hui, Taipei Times
The top three incentives for Taiwanese firms to expand operations in ASEAN were access to the region’s large and growing consumer market, reliable suppliers and access to global markets via free-trade agreements signed between ASEAN members and other nations, with 66 percent, 55 percent and 52 percent of respondents saying so respectively.
Fifty percent of Taiwanese firms said they preferred to expand in ASEAN because of support from their governments, while 32 percent wanted to diversify their production footprint and 25 percent were attracted by the availability of a skilled workforce.
Forty-three percent of firms polled said Singapore was the most favorable market, as it offered the best opportunities for expansion because it is a regional logistics hub and has semiconductor manufacturing capabilities.
The Philippines and Malaysia ranked second and third, with support from 39 percent and 34 percent of firms respectively, while 32 percent backed Thailand, 27 percent selected Indonesia and 25 percent picked Vietnam.
“As demand for semiconductors continues to grow in ASEAN, so will exports of such products from Taiwan. In addition, Taiwanese companies [are] keen to set up manufacturing plants in Southeast Asia — a move accelerated by growing geopolitical and trade tensions, ” Standard Chartered said in the report.
With production facilities located in ASEAN, Taiwanese firms could leverage the connectivity and trade links that the RCEP would offer, the bank said, referring to Hon Hai Precision Industry Co’s (鴻海精密) plans to take advantage of the free-trade agreement by bolstering its production capacity in Vietnam with an investment of US$270 million.
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