Taiwanese companies are cutting their exposure to China just as they ramp up investment in other parts of the world in the latest sign of how growing tensions between the US and China are reshaping global supply chains.
New investments in China by Taiwanese companies declined 10.4 percent year-on-year in the first quarter of the year to US$758 million, data released by the Investment Commission yesterday showed.
That follows an almost 14 percent decrease in such investment last year.
 
                    Photo: Bloomberg
Taiwanese companies, traditionally among the biggest investors in China, have been reducing new capital expenditure in the world’s second-largest economy over the past decade. The slowdown has accelerated since former US president Donald Trump began pushing US companies to decouple from China, a policy largely continued by the administration of US President Joe Biden.
In addition to the slowdown in new money, Taiwanese firms pulled a record amount of profit out of China last year, Chinese-language media reported.
Taiwanese-listed companies repatriated NT$114 billion (US$3.72 billion) of investment income from China last year, the Financial Supervisory Commission said in a statement on Tuesday.
The paring back of cross-strait investment comes as China has ratcheted up the political, military and economic pressure on Taiwan since the 2016 election of President Tsai Ing-wen (蔡英文).
China responded to Tsai’s stopover in California early this month — during which she met with US House of Representatives Speaker Kevin McCarthy — with military drills around Taiwan.
Beijing officials have been keen to reverse the trend of Taiwanese firms exiting China.
Wang Huning (王滬寧), the No. 4 official in the Chinese Communist Party, promised greater efforts to persuade Taiwanese businesses to invest in China and to help them integrate into the Chinese economy.
Slowing investment in China stands in contrast to a rapid increase in Taiwanese investment elsewhere.
Total Taiwanese overseas investment, excluding China, surged 240 percent to US$6.9 billion in the first quarter, the Investment Commission data showed, with half of that due to a US$3.5 billion investment by Taiwan Semiconductor Manufacturing Co (台積電) in a plant in Arizona.
Investment in Southeast Asia also almost doubled as companies seek alternative production bases outside China.

PEACE AND STABILITY: Maintaining the cross-strait ‘status quo’ has long been the government’s position, the Ministry of Foreign Affairs said Taiwan is committed to maintaining the cross-strait “status quo” and seeks no escalation of tensions, the Ministry of Foreign Affairs (MOFA) said yesterday, rebutting a Time magazine opinion piece that described President William Lai (賴清德) as a “reckless leader.” The article, titled “The US Must Beware of Taiwan’s Reckless Leader,” was written by Lyle Goldstein, director of the Asia Program at the Washington-based Defense Priorities think tank. Goldstein wrote that Taiwan is “the world’s most dangerous flashpoint” amid ongoing conflicts in the Middle East and Russia’s invasion of Ukraine. He said that the situation in the Taiwan Strait has become less stable

Japanese Prime Minister Sanae Takaichi yesterday lavished US President Donald Trump with praise and vows of a “golden age” of ties on his visit to Tokyo, before inking a deal with Washington aimed at securing critical minerals. Takaichi — Japan’s first female prime minister — pulled out all the stops for Trump in her opening test on the international stage and even announced that she would nominate him for a Nobel Peace Prize, the White House said. Trump has become increasingly focused on the Nobel since his return to power in January and claims to have ended several conflicts around the world,

REASSURANCE: The US said Taiwan’s interests would not be harmed during the talk and that it remains steadfast in its support for the nation, the foreign minister said US President Donald Trump on Friday said he would bring up Taiwan with Chinese President Xi Jinping (習近平) during a meeting on the sidelines of the APEC Summit in South Korea this week. “I will be talking about Taiwan [with Xi],” Trump told reporters before he departed for his trip to Asia, adding that he had “a lot of respect for Taiwan.” “We have a lot to talk about with President Xi, and he has a lot to talk about with us. I think we’ll have a good meeting,” Trump said. Taiwan has long been a contentious issue between the US and China.

UKRAINE, NVIDIA: The US leader said the subject of Russia’s war had come up ‘very strongly,’ while Jenson Huang was hoping that the conversation was good Chinese President Xi Jinping (習近平) and US President Donald Trump had differing takes following their meeting in Busan, South Korea, yesterday. Xi said that the two sides should complete follow-up work as soon as possible to deliver tangible results that would provide “peace of mind” to China, the US and the rest of the world, while Trump hailed the “great success” of the talks. The two discussed trade, including a deal to reduce tariffs slapped on China for its role in the fentanyl trade, as well as cooperation in ending the war in Ukraine, among other issues, but they did not mention