About 21 percent of Taiwanese businesspeople in China say they plan to decrease their investment in China, a study funded by the Mainland Affairs Council showed.
The council enlisted an academic institution to investigate the challenges facing Taiwanese investors in China, and their plans to address them.
More than 60 percent of Taiwanese businesspeople based in China invest in the manufacturing industry, with a higher percentage of them involved in the manufacturing of electronics, electronic components, computers and optical products, the study found.
Photo: Chung Li-hua, Taipei Times
The businesspeople said their recent investment decisions were mostly influenced by Beijing’s policy of raising workers’ minimum wage.
The restructuring of the global supply chain — triggered by a trade dispute between the US and China — along with China’s changing environment for foreign investors have led to a decrease in investments in China, the study showed.
Nearly 70 percent of Taiwanese businesspeople said their investment in China would remain unchanged in the next three to five years, while only 10 percent said that they would expand the scale of their investments in China and 21.5 percent said they would decrease their investments.
Meanwhile, 45.4 percent of China-based Taiwanese businesspeople said they had reduced their investment because of geopolitical risks, while 40.2 percent said that demand from China’s domestic market has declined.
A relatively small number of the businesspeople surveyed said they remained positive about the potential of the Chinese market.
Overall, profits earned by Taiwanese businesspeople have declined in the past few years, particularly for those in the cement and construction businesses, the study showed.
About 40 percent said they planned to reduce their production capacity or the number of new employees, as they are more pessimistic about the prospects of the Chinese market.
More than 70 percent said that their investment strategies would be to bolster the research and development of products, branding and marketing, while 40 percent said they would increase their investment in Taiwan, Vietnam and other countries.
About 10 percent said that they are considering closing their businesses in China.
The government should recruit consulting firms to help Taiwanese businesspeople address issues around the withdrawal of their investments in China, the study said.
The government should have a comprehensive plan to attract Taiwanese businesspeople back to Taiwan to set up their operations domestically, it said, adding that the government could also invest in green energy, civil aeronautics and other key industries.
In addition to Taiwan, Taiwanese businesspeople should consider investing in Southeast Asian countries, middle and eastern Europe, South America and Africa, the study said.
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