Taiwan is ranked the sixth-best destination for investment in the latest US Business Environment Risk Intelligence (BERI) report, down three notches from the previous report, the Ministry of Economic Affairs said.
The fall in ranking is due to military threats from China and rising geopolitical tensions, the ministry said in a statement on Wednesday.
The most recent BERI report, released in last month, ranked Taiwan with a score of 58 points for profit opportunity — the indicator by which a country is evaluated for investment — compared with 62 in a report released in April.
BERI releases evaluation reports three times a year, reviewing investment environments in 50 countries around the world from the perspective of multinational companies, the ministry said.
The US institution uses three main indicators to assess investment risk — operating conditions, political risk, and foreign exchange and external accounts, the latter representing remittance and repatriation risk.
Taiwan scored 36 in the political risk category, an increase in risk from 42 in April, and was ranked No. 36, down 12 notches, the ministry said.
The sharp fall in this category is responsible for the drop in the country’s overall ranking, it added.
Increased concern over Taiwan’s political risks largely came from the military exercises launched by China after a 19-hour visit by US House of Representatives Speaker Nancy Pelosi early last month, the ministry said.
The BERI report showed that Russia’s invasion of Ukraine increased fears that China could do the same to Taiwan, it said.
In terms of operational risk, Taiwan received 62 points in the latest report, down from 65 in April, representing an increase in operational risk, and took third place worldwide, falling one notch, the ministry said.
Taiwan’s score in the remittance and repatriation risk category stood at 76, compared with 80 in April, representing an increase in risk, while the country placed second in the world, down one notch, it said.
Despite the large-scale military exercises around Taiwan, the impact is expected to be short-lived as the threat did not affect Taiwan’s economic activities, air and marine transportation, or energy security, the ministry said.
Instead, it has drawn global attention to Taiwan’s critical role in the global supply chain, it added.
Among foreign investors who remain upbeat about Taiwan’s economic environment, US-based Air Products, which produces industrial gas for semiconductor production, broke ground on a new plant in Kaohsiung on Monday with a NT$27 billion (US$873.93 million) investment.
Taiwanese semiconductor, tire, and cable and wire suppliers have invested NT$22.2 billion in Taiwan despite China’s activity, it added.
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