Taiwan has been ranked as the 14th-best destination for investment in the latest US Business Environment Risk Intelligence (BERI) report, down eight places from the previous report, the Ministry of Economic Affairs said on Friday, attributing the drop to China’s massive military exercises around Taiwan.
Citing the third BERI report last year, released last month, the ministry said Taiwan received a score of 53 for profit opportunity recommendation — the overall indicator used by BERI to evaluate each country as an investment destination — compared with 58 in the previous report, released in August.
Switzerland placed first with a score of 69, ahead of Norway (67), Canada (60), Denmark (59) and China (58), the report showed.
Photo: CNA
Taiwan took fifth place in Asia, trailing China (No. 5 globally), South Korea (No. 7), Singapore (No. 9) and Indonesia (No. 12), the ministry said.
BERI releases evaluation reports in April, August and December each year, reviewing the investment environment in 50 countries from the perspective of multinational companies.
It uses three indicators to assess investment risk — operating conditions (operation risk), political risk, and foreign exchange/external accounts position (remittance and repatriation) risk.
Taiwan scored 34 in the political risk sub-category, down from 36 in the previous report, while its standing in the sub-category fell to 42nd place from 36th worldwide, and 10th place in Asia, the report showed.
The fall in the political risk factor reflected rising tensions across the Taiwan Strait, in particular in the third quarter of last year, when China performed large-scale military drills around Taiwan, the report said.
In the operations risk category, last month’s report ranked Taiwan fifth globally, down from third in the August report, as the country scored 59 points, compared with 62 points in the previous report.
Taiwan’s global ranking in the category trailed only the US (66 points), Australia (64 points), and Canada and Switzerland (61 points), while being tied with Vietnam and Indonesia.
In the remittance and repatriation category, Taiwan scored 73 points last month, down from 76 points in August, and took third place, also down from second place in August, although the nation occupies the top spot in Asia, the report showed.
Despite the fall in BERI’s overall rankings last month, Taiwan remains a popular destination for foreign investors given its essential position in the global semiconductor supply chain, the ministry said, adding that rising political tensions have not affected investment.
Citing data compiled by the Investment Commission, the ministry said approved foreign direct investment for January to November last year soared by 84.71 percent from a year earlier.
These include investments in a production and research-and-development center by US-based semiconductor equipment supplier Applied Materials Inc in the Southern Taiwan Science Park (南部科學園區), and a plan by the Netherlands’ extreme ultraviolet lithography machine supplier ASML Holding NV to expand production in New Taipei City, the ministry said.
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) initiation of mass production of advanced 3-nanometer process chips in Tainan last month is likely to attract investment in its supply chain, the ministry said.
Among other investments, German drug developer Merck Group has pledged to invest US$600 million in Taiwan over the next five to seven years, while Dutch beer company Heineken NV reached an agreement in June to acquire a brewery in Pingtung County, the ministry said.
Also in the 11-month period, export orders received by Taiwanese companies from the US, Europe and ASEAN rose by 6.7 percent, 2.8 percent and 19.9 percent respectively from a year earlier, it said.
This indicates that foreign buyers remained upbeat about Taiwan’s manufacturing capabilities and investment environment, despite weakening global demand and the COVID-19 pandemic, the ministry said.
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