Since the Control Yuan censured the Executive Yuan for failing to propose effective strategies to deal with Taiwanese business investment in China, former president Lee Teng-hui (
Many of the remarks made on the matter, however, have been little more than subjective statements of opinion and have been of no help in terms of enabling us to understand the truth. Only through objective analysis and inquiry can we arrive at a correct understanding of the issue and make appropriate decisions.
Statistics show that from 1991 to last year, the total value of Taiwanese investment in China was US$29.6 billion -- or 7.5 percent of all foreign investment in the country. Whether that number is too high needs to be judged from both a domestic and international perspective.
During the same 11 years, the total value of investment in Tai-wan by Taiwanese companies was US$646.3 billion. Investment in China accounted for a mere 4.38 percent of the total value of Taiwanese investment on both sides of the Taiwan Strait. Looking at the projects approved by the government's Investment Commission, however, about 90 percent were actually made by 20-plus percent of Taiwan's 100,000 or so manufacturing companies. This percentage is relatively high. But many of these manufacturers have long lost their competitiveness and proven unable to survive in Taiwan. Migrating to China was therefore their only option.
Different people may have varying views on whether such a level of investment volume was too high. Perhaps we can reach a fair conclusion by examining the methods employed by our major competitors.
Statistics show that, from 1995 to 1999, the total value of Singapore's China investment was US$12.76 billion, while that of its domestic investment was US$646.3 billion. Thus, the city-state's investments in China accounted for 7.61 percent of its total investment volume in the two countries.
South Korea invested about half of Taiwan's total investment volume in China in the same period, in the face of the severe Asian financial crisis. Although Japan and the US have frequently criticized China's investment environment, their own levels of investment in the country have surpassed that of Taiwan since 1995 and the gap is gradually broadening.
Taiwan's investment in China is no higher than that of its major competitors, suggesting that the nation's so-called "China fever" is relatively rational.
From Taiwan's trade surplus, we can easily see the benefit of our investment in China. According to the Mainland Affairs Council, Taiwan has accumulated a US$162.8 billion surplus in an 11-year period. Generally speaking, each dollar invested has generated more than five dollars of revenue and profits continue to grow.
No business can ensure that it will never suffer a loss, but amount of unsuccessful investment in Taiwan far exceeds the amount of failed Taiwanese investment in China. Since over 400 of the world's top 500 enterprises have invested in China, Taiwanese who are investing there are actually competing with the world's top companies. The current failure rate therefore does not seem inappropriate.
What the government should do is remind local businesses about possible traps in China while leaving other matters to the market and the manufacturers themselves, since their ability and vision have long surpassed those of the government.
Tu Jenn-hwa is an associate professor at the Graduate Institute of National Development of National Taiwan University.
TRANSLATED BY EDDY CHANG
Taiwan’s fall would be “a disaster for American interests,” US President Donald Trump’s nominee for undersecretary of defense for policy Elbridge Colby said at his Senate confirmation hearing on Tuesday last week, as he warned of the “dramatic deterioration of military balance” in the western Pacific. The Republic of China (Taiwan) is indeed facing a unique and acute threat from the Chinese Communist Party’s rising military adventurism, which is why Taiwan has been bolstering its defenses. As US Senator Tom Cotton rightly pointed out in the same hearing, “[although] Taiwan’s defense spending is still inadequate ... [it] has been trending upwards
Small and medium enterprises make up the backbone of Taiwan’s economy, yet large corporations such as Taiwan Semiconductor Manufacturing Co (TSMC) play a crucial role in shaping its industrial structure, economic development and global standing. The company reported a record net profit of NT$374.68 billion (US$11.41 billion) for the fourth quarter last year, a 57 percent year-on-year increase, with revenue reaching NT$868.46 billion, a 39 percent increase. Taiwan’s GDP last year was about NT$24.62 trillion, according to the Directorate-General of Budget, Accounting and Statistics, meaning TSMC’s quarterly revenue alone accounted for about 3.5 percent of Taiwan’s GDP last year, with the company’s
There is nothing the Chinese Nationalist Party (KMT) could do to stop the tsunami-like mass recall campaign. KMT Chairman Eric Chu (朱立倫) reportedly said the party does not exclude the option of conditionally proposing a no-confidence vote against the premier, which the party later denied. Did an “actuary” like Chu finally come around to thinking it should get tough with the ruling party? The KMT says the Democratic Progressive Party (DPP) is leading a minority government with only a 40 percent share of the vote. It has said that the DPP is out of touch with the electorate, has proposed a bloated
In an eloquently written piece published on Sunday, French-Taiwanese education and policy consultant Ninon Godefroy presents an interesting take on the Taiwanese character, as viewed from the eyes of an — at least partial — outsider. She muses that the non-assuming and quiet efficiency of a particularly Taiwanese approach to life and work is behind the global success stories of two very different Taiwanese institutions: Din Tai Fung and Taiwan Semiconductor Manufacturing Co (TSMC). Godefroy said that it is this “humble” approach that endears the nation to visitors, over and above any big ticket attractions that other countries may have
RSS