Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday.
The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed.
Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan.
Photo: AFP
Investments by Vanguard International Semiconductor Corp (世界先進), a smaller contract chipmaker, semiconductor distributor WT Microelectronics Co (文曄科技) and iPhone assembler Hon Hai Precision Industry Co (鴻海精密) were also factors, Chen said.
The central bank said the portfolio investment account posted a net asset increase of US$66.33 billion last year, down US$5.59 billion from a year earlier.
As a result, Taiwan’s net fund outflow, which measures the flow of direct and portfolio investments, reached US$94.39 billion in the year, an increase of US$9.02 billion from the previous year.
In the fourth quarter of last year, the country’s net fund outflow totaled US$30.70 billion, an increase of US$2.53 billion from the previous year, the 58th consecutive quarter of net fund outflows — the longest streak in Taiwan’s history.
As Taiwan continues to report net fund outflows in its financial account, concerns over sustained massive overflows have deepened.
About concerns that investors might continue moving funds out of the country, the central bank said that net financial account outflows are not unusual in a country such as Taiwan, which has a long-standing current account surplus.
The central bank said countries with long-standing current account surpluses, including Japan, Singapore, South Korea and Germany, have also tended to record net financial account outflows.
The current account primarily measures a country’s exports and imports of goods and services. Last year, Taiwan recorded a current account surplus of US$113.83 billion, an increase of US$7.99 billion from the previous year, the central bank said.
In the fourth quarter alone, Taiwan recorded a current account surplus of US$34.40 billion, down US$240 million from a year earlier, it said.
Chen said if Taiwanese companies generate profits from overseas direct investments, including dividend income, the gains would be logged as primary income in the current account.
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