Taiwanese companies have been scaling back their investments in China so far this year to just 11 percent of the nation’s total outbound direct investment, the lowest share in decades and well below their heavy spending in the US and Germany, the Nikkei Asia reported yesterday.
During the first 11 months of this year, Taiwan’s approved outbound investment soared 87 percent annually to US$25.7 billion, while investment in China plummeted 34 percent year-on-year to US$2.96 billion, about 11 percent of the total, statistics released by the Ministry of Economic Affairs on Wednesday last week showed.
China had been the biggest investment destination for Taiwanese companies, but things changed at the beginning of this year, the ministry said.
Photo: Ann Wang, Reuters
With China-bound investment in decline, China for the first time was replaced by France and dropped to the second-largest outbound investment destination in February.
The decline in China-bound investment extended to the first 11 months of this year.
The Nikkei Asia attributed the drop-off to China’s economic doldrums, as well as the influence of the long-standing and mounting tensions between the two sides.
Taiwanese companies are also finding it harder to conduct business in China amid trade friction between Washington and Beijing that has led to US duties on Chinese goods, the report said.
Taiwanese spending in China has plummeted from a peak of 84 percent in 2010, when Taiwan and China signed the Economic Cooperation Framework Agreement, but even from last year, when China still accounted for 34 percent of outbound investment, the report said.
This year’s total is expected to clock in at less than half of the 30-year low of 28 percent in 1999, it said.
Meanwhile, investment in Europe and the US has skyrocketed.
Taiwanese foreign direct investment in the US surged ninefold in the first 11 months of this year to US$9.64 billion, making up 37 percent of the total, the report said, citing the ministry’s statistics.
Spending in Germany alone soared past the China figure, ballooning 25-fold to US$3.9 billion, driven by Taiwan Semiconductor Manufacturing Co’s (台積電) investment in a new fab in Dresden, it said.
With China’s economy still stagnating and the Washington-Beijing technology dispute unresolved, Taiwan’s spending in China looks unlikely to bounce back any time soon, the report said.
“Taiwanese investment in China continuing to decline will be the main scenario as long as US-China tensions continue,” Sun Ming-te (孫明德) of the Taiwan Institute of Economic Research (台經院) said.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS