Taiwan Firms Pull Back in China as Investments Elsewhere Surge

  • 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% y/y in 1Q23 to USD758mn, according to data released by Taiwan’s Investment Commission on 20 Apr. That follows an almost 14% decrease in such investment in 2022.
  • In addition to the slowdown in new money, Taiwanese firms pulled a record amount of profits out of China in 2022, according to local media. Taiwanese listed companies repatriated NT114bn of investment income from China in 2022, according to a statement from the Financial Supervisory Commission on 18 Apr.
  • Chinese officials have been keen to reverse the trend. Wang Huning, the No. 4 official in China’s ruling Communist Party, promised greater efforts to persuade Taiwanese businesses to invest in China and to help them integrate into the Chinese economy, the official Xinhua News Agency reported Monday.
  • Slowing investment in China stands in contrast to a rapid increase in Taiwanese investment elsewhere. Total Taiwanese overseas investment, excluding China, surged 240% to USD6.9bn in 1Q23, the Investment Commission data show, with half of that due to the USD3.5bn investment by Taiwan Semiconductor Manufacturing Co. in a plant in Arizona.
  • Investment in Southeast Asia also almost doubled as companies seek alternative production bases outside China.

External Link : https://www.bloomberg.com/news/articles/2023-04-20/taiwan-firms-pull-back-in-china-as-investments-elsewhere-surge