Taiwanese business investments in countries covered by the New Southbound Policy have surged this year, partly due to a continued global supply chain realignment after the COVID-19 pandemic and also because of increasing US-China trade tensions.
Statitics released by the Ministry of Economic Affairs’ Department of Investment Review on Friday showed that outbound investments approved by the government, excluding those to China, in the first nine months of this year totaled US$17.48 billion, an annual increase of 190.06 percent. The department said that investments by Taiwan Semiconductor Manufacturing Co in the US and those by Hon Hai Precision Industry Co (better known internationally as Foxconn) and Yang Ming Marine Transport Corp in Singapore were a major boost to Taiwanese firms’ outlays for overseas expansions during the nine-month period. Taiwan’s outbound investments to New Southbound Policy countries totaled US$4.33 billion in the first nine months, up 65.49 percent from the same period last year thanks to local firms’ increasing investments in Singapore, Vietnam and Thailand, the department said.
By comparison, the nation’s outbound investments to China decreased 17.03 percent year-on-year to US$2.53 billion in the first nine months, the department said, predicting that the full-year figure would reach US$3.5 billion, which is not only lower than the US$4.1 billion recorded in 2019 following the US-China trade spat, but also likely to be the lowest since China joined the WTO in 2001, it said.
Taiwan’s outbound investments to New Southbound Policy countries might surpass those to China for a second straight year, after investments to these countries — ranging from electronics and computers to textiles and sportswear — reached US$5.27 billion last year compared with the US$5.05 billion to China.
This development echoes a global trend that firms are compelled to relocate some of their manufacturing operations to South and Southeast Asia from China to avoid US tariffs, as well as reduce their single-market dependence on China. From a national perspective, this build-out helps reinforce Taiwan’s economic ties with South and Southeast Asia and several other regions, while bolstering the nation’s economic resilience.
When choosing investment locations, Taiwanese firms’ main considerations are always land, labor, infrastructure, market potential, local supply chains, political and social stability, personnel and property safety, and the distance from Taiwan. So far, the manufacturing sector remains a hotspot for investments in New Southbound Policy countries, although Taiwanese capital is increasingly flowing into those markets through equity investments, particularly via joint ventures in finance, transportation, healthcare and green energy.
As long as economic benefits and geopolitics are considered, New Southbound Policy countries are poised to be a prime destination for Taiwanese firms pursuing a “China-plus-one” investment strategy to realign supply chains and avoid over-concentration on China. Yet, challenges remain, such as underdeveloped infrastructure and a scarcity of skilled labor.
A lack of workers in ASEAN has become an acute issue after foreign capital’s rapid increase in the post-COVID-19 era for dual sourcing of raw materials and supply chain reorganization. For example, Vietnam, Thailand, Malaysia and even Indonesia have experienced extensive or partial worker and talent shortages, posing challenges for many industries.
Taiwan’s government should help firms address this staffing issue by seeking ways to work with regional counterparts to cultivate skilled labor, promote talent exchanges and cooperate in technical and vocational education. It should also help Taiwanese businesses to understand new international labor regulations and demand that local firms improve regulatory compliance overseas.
Taiwan’s semiconductor industry gives it a strategic advantage, but that advantage would be threatened as the US seeks to end Taiwan’s monopoly in the industry and as China grows more assertive, analysts said at a security dialogue last week. While the semiconductor industry is Taiwan’s “silicon shield,” its dominance has been seen by some in the US as “a monopoly,” South Korea’s Sungkyunkwan University academic Kwon Seok-joon said at an event held by the Center for Strategic and International Studies. In addition, Taiwan lacks sufficient energy sources and is vulnerable to natural disasters and geopolitical threats from China, he said.
After reading the article by Hideki Nagayama [English version on same page] published in the Liberty Times (sister newspaper of the Taipei Times) on Wednesday, I decided to write this article in hopes of ever so slightly easing my depression. In August, I visited the National Museum of Ethnology in Osaka, Japan, to attend a seminar. While there, I had the chance to look at the museum’s collections. I felt extreme annoyance at seeing that the museum had classified Taiwanese indigenous peoples as part of China’s ethnic minorities. I kept thinking about how I could make this known, but after returning
What value does the Chinese Nationalist Party (KMT) hold in Taiwan? One might say that it is to defend — or at the very least, maintain — truly “blue” qualities. To be truly “blue” — without impurities, rejecting any “red” influence — is to uphold the ideology consistent with that on which the Republic of China (ROC) was established. The KMT would likely not object to this notion. However, if the current generation of KMT political elites do not understand what it means to be “blue” — or even light blue — their knowledge and bravery are far too lacking
Taipei’s population is estimated to drop below 2.5 million by the end of this month — the only city among the nation’s six special municipalities that has more people moving out than moving in this year. A city that is classified as a special municipality can have three deputy mayors if it has a population of more than 2.5 million people, Article 55 of the Local Government Act (地方制度法) states. To counter the capital’s shrinking population, Taipei Mayor Chiang Wan-an (蔣萬安) held a cross-departmental population policy committee meeting on Wednesday last week to discuss possible solutions. According to Taipei City Government data, Taipei’s