The Ministry of Economic Affairs last week reported that Taiwanese firms’ outbound investments approved by the Department of Investment Review last year reached a new high, totaling US$48.59 billion, led by Taiwan Semiconductor Manufacturing Co’s huge investments in the US and Japan. The data also showed that approved outbound investments to China were US$3.65 billion, which for the third consecutive year was lower than those to countries covered under the government’s New Southbound Policy at US$8.72 billion. The figures show that Taiwanese companies are continuing to reposition themselves amid the reorganization of global supply chains, while increasing their investments in the US, Europe, Japan and New Southbound Policy countries to diversify risk.
China-bound investments have been on a downward trend in the past few years. Last year’s US$3.65 billion was not only lower than the US$4.1 billion recorded in 2019 following a US-China trade spat, but its proportion of the total approved outbound investment was also substantially down to 7.51 percent, from 11.42 percent in 2023 and 33.62 percent in 2022. More Taiwanese firms are pursuing a “China Plus One” investment strategy to realign supply chains and avoid overconcentration on China, where political and economic risks have increased due to a slowdown in its economy, a rise in production costs and stricter national security controls. Countries in South and Southeast Asia, along with the North American market, are poised to be prime destinations for Taiwanese firms adopting the strategy.
Several Taiwanese firms are also following in the footsteps of their foreign peers in speeding up their withdrawal from China. For example, on Dec. 30 last year, silicon substrate maker Kinsus Interconnect Technology Corp announced the sale of an 80.5 percent stake in its Chinese substrate unit, Kinsus Interconnect Technology Suzhou Corp, and 100 percent of its Chinese printed circuit board business, Piotek Computer (Suzhou) Corp. It said it would use the proceeds to pursue new investments in Taiwan and elsewhere in Asia.
The withdrawal of Taiwanese and foreign companies from China can be seen as part of a global business restructuring triggered by US-China disputes. This is also one of the reasons China’s unemployment rate remains high. If the trade spat between the US and China escalates during a second term of US President Donald Trump — who was to take office after press time last night — the Chinese economy would only worsen and more foreign companies would choose to move elsewhere. However, Beijing might intervene, and Taiwanese businesses would likely be the first to bear the brunt of any restrictions.
Foreign media recently reported that Taiwanese contract electronics maker Hon Hai Precision Industry Co, known internationally as Foxconn Technology Group and which is a major assembler for Apple Inc, has paused dispatching Chinese workers to its iPhone manufacturing plants in India, while those already there have been instructed to return to China. The company has also delayed shipping specialized manufacturing equipment from China to India, reports said. Some sources said that the Chinese government was behind the changes. If that is true, then clearly the Chinese Communist Party is starting to take measures to stop the “Chine Plus One” trend.
The disruptions at Foxconn’s operations in India come against the backdrop of long-standing border disputes and economic rivalry between China and India. If China seeks to limit Taiwanese businesses’ transfer of labor, technology and equipment to other countries, it would affect their operations in Vietnam, Thailand and Malaysia, where they have been gearing up for expansions. Besides considering how to adjust their global deployment, Taiwanese businesses operating in China also need to think about how to respond to this new challenge.
Chinese Nationalist Party (KMT) caucus whip Fu Kun-chi (傅?萁) has caused havoc with his attempts to overturn the democratic and constitutional order in the legislature. If we look at this devolution from the context of a transition to democracy from authoritarianism in a culturally Chinese sense — that of zhonghua (中華) — then we are playing witness to a servile spirit from a millennia-old form of totalitarianism that is intent on damaging the nation’s hard-won democracy. This servile spirit is ingrained in Chinese culture. About a century ago, Chinese satirist and author Lu Xun (魯迅) saw through the servile nature of
In their New York Times bestseller How Democracies Die, Harvard political scientists Steven Levitsky and Daniel Ziblatt said that democracies today “may die at the hands not of generals but of elected leaders. Many government efforts to subvert democracy are ‘legal,’ in the sense that they are approved by the legislature or accepted by the courts. They may even be portrayed as efforts to improve democracy — making the judiciary more efficient, combating corruption, or cleaning up the electoral process.” Moreover, the two authors observe that those who denounce such legal threats to democracy are often “dismissed as exaggerating or
Monday was the 37th anniversary of former president Chiang Ching-kuo’s (蔣經國) death. Chiang — a son of former president Chiang Kai-shek (蔣介石), who had implemented party-state rule and martial law in Taiwan — has a complicated legacy. Whether one looks at his time in power in a positive or negative light depends very much on who they are, and what their relationship with the Chinese Nationalist Party (KMT) is. Although toward the end of his life Chiang Ching-kuo lifted martial law and steered Taiwan onto the path of democratization, these changes were forced upon him by internal and external pressures,
The Chinese Nationalist Party (KMT) caucus in the Legislative Yuan has made an internal decision to freeze NT$1.8 billion (US$54.7 million) of the indigenous submarine project’s NT$2 billion budget. This means that up to 90 percent of the budget cannot be utilized. It would only be accessible if the legislature agrees to lift the freeze sometime in the future. However, for Taiwan to construct its own submarines, it must rely on foreign support for several key pieces of equipment and technology. These foreign supporters would also be forced to endure significant pressure, infiltration and influence from Beijing. In other words,
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