The US-China trade dispute poses a tough challenge for Taiwan, but the government’s quick response has helped turn the threat into an opportunity by facilitating a huge repatriation of Taiwanese capital, the minutes of the central bank’s June 20 meeting released yesterday showed.
Board directors shared the view that the trade friction has hit Taiwanese firms hard and fast, as seen by seven straight months of export declines before June.
Some firms moved high-end manufacturing back to Taiwan, while relocating lower-end production to Southeast Asia, they said.
The government has removed investment hurdles and rolled out incentives to lure Taiwanese capital from China and elsewhere, one director said.
So far this year, the Ministry of Economic Affairs has approved 98 applications, with investment valued nearly NT$500 billion (US$16.03 billion).
As more products are manufactured locally rather than overseas, the domestic supply chain would grow and flourish, the director said.
Another director said the swelling of capital repatriation also has to do with the adoption by many countries of the Common Reporting Standard to combat tax evasion.
As some returning investment cases involve domestic bank lending, financial authorities should pay attention to how this would affect loanable funds in the local market, the director said.
One director said that last year’s property transactions recovered to 2013 levels, but the number of vacant units has continued to pick up over the past few years.
The pressure to reduce housing vacancies had been building as seen in the lukewarm presale market, the director said.
The recovery in housing prices and transactions looks more like a return to normal instead of a boom in property sales and value, the director said.
Another board director said that construction and mortgage loans have reached seven or eight-year highs, and new or existing home prices have inched up for several quarters in a row.
Commercial properties and industrial land have also seen an upsurge this year aided by returning capital, the director said.
The director called for close monitoring of the real-estate market and potential loan concentration so that regulators can respond quickly, if necessary, before expectations for home price appreciation take hold.
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