Taiwanese firms had, in terms of book value, invested approximately NT$8.5 trillion (US$262.73 billion) in China and Hong Kong as of June 30, while 68 out of 700 Taiwanese companies that had explored business opportunities in China had 100 percent risk exposure, government reports showed.
China last month announced that it was auditing the taxes of Hon Hai Precision Industry Co (鴻海精密), known internationally as Foxconn Technology Group (富士康科技集團), sparking concern over the risks faced by Taiwanese firms with investments in China and Hong Kong.
Risk exposure is calculated based on the amount invested elsewhere compared with the net worth of the parent company, which represents the rights of the shareholders.
Photo: Reuters
Listed Taiwanese companies are expected to submit a quarterly report showing all funds wired from Taiwan, all funds wired and the dividends made, as well as the net quarterly profit or loss and total book value at the end of the quarter.
If the amount of investment in China exceeds the net worth of the parent company, it is considered overt risk exposure.
Of the 68 Taiwanese companies that exceeded 100 percent risk, 26 were listed as registered in the Cayman Islands or were foreign companies that were not listed abroad but were listed in Taiwan.
Disregarding companies registered in the Cayman Islands and companies whose parent companies had a net worth under NT$10 billion, there were 16 firms whose risk exposure in China exceeded 100 percent, with paper manufacturing company Longchen Paper & Packaging Co (榮成) topping the list with an overexposure rate of 165.98 percent.
Longchen Paper is China’s fourth largest paper manufacturer, with more than 20 subsidiaries. As of June 30, it had invested NT$11.8 billion in China, or more than 50 percent of the net worth of its parent company.
In second place was computer firm Clevo Co (藍天電腦), with an overexposure rate of 156.11 percent and investments of NT$63 billion.
Hon Hai had a net worth of NT$1.39 trillion, an overexposure rate of 117.12 percent and an end-of-quarter book value of NT$1.6 trillion. It had invested NT$203.8 billion in China.
Taiwan Semiconductor Manufacturing Co (台積電) with a total net worth of NT$3.18 trillion, had only invested NT$49.4 billion, and its exposure rate was 5.6 percent.
Ninety percent of Taiwanese firms invested via third-party intermediaries, with only 10 percent making a direct investment. Hon Hai, for example, made all of its investments via third-party intermediaries.
Statistics showed that funds wired to China from Taiwan exceeded NT$2.2 trillion, but if the investment capital was multiplied by the stakes held by Taiwanese businesspeople, the total value of Taiwanese funds wired to China exceeded NT$3.3 trillion.
From 1991 through the end of September, Taiwan approved 45,444 applications to invest in China, with total funds valued at NT$6.4 trillion, data from the Ministry of Economic Affairs showed.
However, the Chinese Ministry of Commerce said that up until the end of last year, it had only approved 120,000 investment applications from Taiwan, with total funds valued at NT$2.3 trillion.
Additional reporting by Fang Wei-chieh
Taiwan last night blanked world No. 1 Japan 4-0 to win the World Baseball Softball Confederation’s (WBSC) Premier12 for the first time. Taiwanese ace Lin Yu-min (林昱珉) held defending champions Japan to just one hit and no runs in the first four innings, before catcher Lin Chia-cheng (林家正) opened the fifth inning with a solo home run. That was soon followed by a three-run homer from Taiwanese captain Chen Chieh-hsien (陳傑憲) to put Taiwan ahead in the prestigious tournament of the world’s top 12 baseball teams. In addition to a superb performance from 21-year-old Arizona Diamondbacks prospect Lin, three more Taiwanese pitchers
Taiwan yesterday advanced to the gold medal match of the World Baseball Softball Confederation’s (WBSC) Premier12 for the first time in history, despite last night losing 9-6 to Japan. Taiwan advanced after the US defeated Venezuela in the first game on the last day of the Super Round. However, the US had no chance of advancing to the championship game unless it defeated Venezuela by at least nine points. The US won 6-5. As a result, the two teams — who both had one win and two losses in the Super Round — are to face off again in the
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, yesterday held an equipment installation ceremony for its first 2-nanometer fab in Kaohsiung, six months ahead of schedule, Kaohsiung Mayor Chen Chi-mai (陳其邁) said. “To cope with the strong global demand for advanced chips, TSMC is to start moving in equipment for its first-ever 2-nanometer fab half a year earlier than scheduled,” Chen said at an question-and-answer session at the Kaohsiung City Council. TSMC’s 2-nanometer process technology would help accelerate the development of artificial intelligence (AI) applications as well as the transformation of local industries in Kaohsiung, Chen said in a
TEAM TAIWAN: While lawmakers proposed declaring Nov. 24 a national day, the CPBL commissioner urged the legislature to pass the budget for sports development Lawmakers yesterday proposed designating Nov. 24 as National Baseball Day and updating the design of the NT$500 bill to honor the national team’s victory in the World Baseball Softball Confederation’s Premier12 championship on Sunday, as thousands of fans came out to see the players parade down the streets of Taipei. Players, coaches and staff from the national team returned home on Monday night after achieving their best-ever performance in an international baseball tournament. After receiving a rapturous welcome at the airport, the players turned out yesterday for a street parade in front of thousands of adoring fans waving Taiwanese flags and
RSS