Following the further opening of Taiwanese investment and trade with China last August, investments have been pouring into China. The government is unable to stem the steady increase in capital flowing into China, at best succeeding only in slowing the rate of increase. By now, over 50,000 Taiwanese businesses have invested over US$100 billion in China. Investments have expanded from traditional to high-tech industries and the trend shows investments growing in size.
A typical example of this is the investments by Wang Yung-ching (
Recently, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) have been very active. TSMC chairman Morris Chang (張忠謀) has been criticising the years of restraint under the "no haste, be patient" policy, while UMC has back-pedalled on plans for a large wafer foundry in Tainan. Instead it is planning a plant in the Suzhou Industrial Park in Jiangsu Province. It also is planning to build a 12-inch wafer plant in Singapore with US-based Advanced Micro Devices Inc (AMD).
Taiwanese high-tech companies are busy positioning themselves in China. Even though they say that this is only one link in their overall global positioning, investments in Taiwan have not increased accordingly -- rather, they have fallen. A further hollowing out of Taiwanese industry seems inevitable.
In a speech on Jan. 31, US Trade Representative Robert Zoellick predicted that China will become the world's largest producer of IT hardware within the next decade and challenge Tai-wan's position as the center for semiconductor manufacturing.
Judging from the competition between Taiwanese semiconductor manufacturers investing in China, however, Taiwan will be surpassed by China within five years -- after the government allows eight-inch wafer manu-facturers to move to China -- if authorities cannot implement an effective system of controls. If Taiwan does not develop more advantageous and more competitive industries, we will suffer an even deeper economic crisis and face even higher unemployment.
The development of TSMC, UMC and other high-tech busi-nesses have all been encouraged by the government through the Industrial Technology Research Institute (工業技術研究院) and industrial parks, which have invested tens of billions of New Taiwan dollars. TSMC and UMC are the two most competitive Taiwanese wafer manufacturers in the global market. Now they are competing to get out of the country.
So what is the problem? Since the government's substitution of the "no haste, be patient" policy by the "active opening and effective management" policy last November, overseas investment and capital outflow pressures have increased by the day. Even though the government is fighting "black gold" politics and improving public security and the financial situation, the problem with companies investing in China is that they leave debt and unemployment in Taiwan.
So where does the problem lie? Has the investment environment in Taiwan really deteriorated so far? Are there really no investment opportunities in Taiwan? Is China really a money-making paradise?
The greatest challenge for the new Cabinet and its focus on the economy will be to increase administrative efficiency, im-prove the investment environment and formulate a set of regulations for the effective management of investments in China.
Wang To-far is a professor of economics at National Taipei University.
The first Donald Trump term was a boon for Taiwan. The administration regularized the arms sales process and enhanced bilateral ties. Taipei will not be so fortunate the second time around. Given recent events, Taiwan must proceed with the assumption that it cannot count on the United States to defend it — diplomatically or militarily — during the next four years. Early indications suggested otherwise. The nomination of Marco Rubio as US Secretary of State and the appointment of Mike Waltz as the national security advisor, both of whom have expressed full-throated support for Taiwan in the past, raised hopes that
There is nothing the Chinese Nationalist Party (KMT) could do to stop the tsunami-like mass recall campaign. KMT Chairman Eric Chu (朱立倫) reportedly said the party does not exclude the option of conditionally proposing a no-confidence vote against the premier, which the party later denied. Did an “actuary” like Chu finally come around to thinking it should get tough with the ruling party? The KMT says the Democratic Progressive Party (DPP) is leading a minority government with only a 40 percent share of the vote. It has said that the DPP is out of touch with the electorate, has proposed a bloated
Authorities last week revoked the residency permit of a Chinese social media influencer surnamed Liu (劉), better known by her online channel name Yaya in Taiwan (亞亞在台灣), who has more than 440,000 followers online and is living in Taiwan with a marriage-based residency permit, for her “reunification by force” comments. She was asked to leave the country in 10 days. The National Immigration Agency (NIA) on Tuesday last week announced the decision, citing the influencer’s several controversial public comments, including saying that “China does not need any other reason to reunify Taiwan with force” and “why is it [China] hesitant
A media report has suggested that Chinese Nationalist Party (KMT) Chairman Eric Chu (朱立倫) was considering initiating a vote of no confidence in Premier Cho Jung-tai (卓榮泰) in a bid to “bring down the Cabinet.” The KMT has denied that this topic was ever discussed. Why might such a move have even be considered? It would have been absurd if it had seen the light of day — potentially leading to a mass loss of legislative seats for the KMT even without the recall petitions already under way. Today the second phase of the recall movement is to begin — which has