For a variety of reasons, Taiwanese businesses are reducing their investments in mainland China. One reason is the difficulties China faced during the COVID-19 pandemic, and the extreme challenges that were specific to China, including their unprecedented extended shutdowns of large commercial cities such as Shanghai, among others.
Many larger, Taiwanese companies have been relocating their manufacturing facilities and supply chains to Southeast Asian countries. Much of this migration of manufacturing capabilities has also been due to the worsening trade war between the US and China.
Another factor driving the exodus of Taiwanese investment is the softening Chinese economy and weakening demand for goods on the Mainland. It is estimated that most of the larger Taiwanese businesses have already relocated their manufacturing outside of China, and that most of the remaining Taiwanese businesses are small and medium sized, with less available funds to move operations. Many small and medium size Taiwanese business owners are retiring, utilizing Chinese executives to run the business, or selling their businesses to Chinese firms.
Another factor is increasing tensions between China and Taiwan. Read the full article here.
|Taiwan investment on mainland for past three years|
|Year||Growth in number of investments||Growth in investment value|
(Source: Investment Commission, MOEA, Taiwan)
Top image: IWBI