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.
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
Sung Chien-liang (宋建樑), the leader of the Chinese Nationalist Party’s (KMT) efforts to recall Democratic Progressive Party (DPP) Legislator Lee Kun-cheng (李坤城), caused a national outrage and drew diplomatic condemnation on Tuesday after he arrived at the New Taipei City District Prosecutors’ Office dressed in a Nazi uniform. Sung performed a Nazi salute and carried a copy of Adolf Hitler’s Mein Kampf as he arrived to be questioned over allegations of signature forgery in the recall petition. The KMT’s response to the incident has shown a striking lack of contrition and decency. Rather than apologizing and distancing itself from Sung’s actions,
US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
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