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.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
Sasha B. Chhabra’s column (“Michelle Yeoh should no longer be welcome,” March 26, page 8) lamented an Instagram post by renowned actress Michelle Yeoh (楊紫瓊) about her recent visit to “Taipei, China.” It is Chhabra’s opinion that, in response to parroting Beijing’s propaganda about the status of Taiwan, Yeoh should be banned from entering this nation and her films cut off from funding by government-backed agencies, as well as disqualified from competing in the Golden Horse Awards. She and other celebrities, he wrote, must be made to understand “that there are consequences for their actions if they become political pawns of