At the same time, Taiwanese companies are significantly reducing their investment in China. According to Taiwanese media such as the Free Times, the Investment Review Committee of the Ministry of Economy of Taiwan recently said that the results of the survey were found in the “2022 Survey on Overseas Investment Business Operations.”According to the survey results, traditional industries are Malaysia, Indonesia, Singapore, and the Philippines (16.72%), the United States (13.77%), and Vietnam (11.88%), which Taiwanese entrepreneurs consider investing in over the next three years.The U.S. (12.46 percent), China’s Guangdong Province (10.28 percent), and Vietnam (9.97 percent) came in the order of information and communication industries.Vietnam (16.52%) accounted for the service industry, while the U.S., Malaysia, Indonesia, Singapore, and the Philippines accounted for 11.45%, respectively.
The traditional way Taiwanese companies receive foreign orders from Taiwan and ship them from China has also recently changed.According to the Korea Freedom Times, the ratio of foreign orders to Taiwan reached about 69.08% in 2021 after the recent U.S.-China trade conflict, up 12.08 percentage points from 2016 (about 57%), the highest ever.On the contrary, the ratio of foreign orders to China was 15.47% in 2021, down 9.65 percentage points from 2019 (25.12%).
In the case of the information and communication industry, the ratio of shipments to China exceeded 60% in 2017 and 2018, but decreased to less than 50% in 2019. Taiwan’s shipment ratio surpassed China’s in 2020 and hit a record high of 42.31 percent in 2021.The Free Times reported that Taiwanese authorities approved investment of USD 127.171 billion (about KRW 157.561 trillion) in three places in China, Jiangsu Province, Shanghai and Guangdong Province, from 1991 to November last year.
However, he added that after the U.S.-China trade dispute in 2018, investment in Shanghai and Guangdong was less than 30% of their heyday.He also said investment in Jiangsu Province, the center of Taiwan’s information and communication business, is also stagnant.In a related development, the Investment Review Committee explained that the proportion of Taiwanese entrepreneurs’ investment in Taiwan increased six to seven times than that of Chinese investment due to COVID-19 in China and frequent industrial regulations and supervision by Chinese authorities.
In addition, China’s recent ban on Taiwan’s agricultural imports and Taiwan’s application for membership of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) are believed to have affected Taiwanese companies’ investment movements.
TED PARK
ASIA JOURNAL
