According to the German Business Confidence Survey Report 2023/2024 released by the German Trade Office Taipei on Feb. 22, 48.5 percent of German companies in Taiwan are willing to invest here in the next two years, which is a new high, but they are also concerned about the issues like labor shortages and cross-strait relations.
Total trade between Taiwan and Germany last year reached US$22 billion, the report showed.
Although the amount declined from US$23 billion in 2022, total trade volume increased 38 percent compared with the pre-COVID-19 pandemic level.
Germany’s total investment in Taiwan last year reached US$1.55 billion, a significant increase from 2022, making the European nation the second-largest foreign investor in Taiwan, the report showed.
German investment in China fell sharply in the third quarter last year by 2.2 billion euros (US$2.4 billion), hitting the lowest level in six years, German business daily Handelsblatt reported on Dec. 14 last year.
FALL IN CHINA
In particular, German equity investment in China dropped sharply by 3.9 billion euros.
Handelsblatt cited several reasons for the decline in investment in China:
First, in the past few years, China’s investment environment has deteriorated significantly. With the growing influence of the Chinese Communist Party (CCP) over the economy, even access to information is punishable.
In addition, as China’s economic growth and consumption slow, many Western countries have adopted derisking strategies to reduce their dependence on China.
INTIMIDATION FAILING
When investing in Taiwan, cross-strait issues are the focus of investors’ attention. China and its associates in Taiwan have been escalating tensions between Taipei and Beijing, as if war might break out at any time — this is their purpose of trying to deter foreign investment from entering Taiwan. Their motivation is truly abominable.
However, the increase in German capital in Taiwan and decrease in China show that German investors are not intimidated by China and its associates in Taiwan.
On the contrary, it is the CCP’s growing influence over the economy, in which accessing information may be punishable, that scares off foreign investors.
Beijing’s new Counterespionage Law and the National Security Law implemented last year are bad laws that scare off foreign investment.
On the other hand, in Taiwan, the democratic and rule-of-law environment guarantees the political security of foreign investment.
The contrast in the status of foreign investment by Germany and other countries in Taiwan and in China is reminiscent of the ancient Chinese saying: “Those who act justly receive lots of support; those who are unjust hardly get support” (得道多助,失道寡助).
Yu Kung is an entrepreneur.
Translated by Lin Lee-kai
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