“This shows that manufacturers are worried about market prospects and are becoming more cautious about investing in the mainland,” the federation said in a summary of the survey conducted last year.
As mainland China seeks more Taiwanese money, why aren’t more listening?
Meanwhile, hits in the Chinese economy, concerns about any potential impacts from a military conflict, and the enduring impact of geopolitical tensions – including from the US-China trade war – are said to be underpinning the decisions of Taiwanese businesspeople with regard to the mainland .
China is trying to ease unemployment, control a housing crisis, and stimulate domestic consumption to inject more life into its economy.
Taiwanese investors have also watched the cost of business rise, and cross-strait political tensions have heated up over the past few years.
Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the US, do not recognize Taiwan as an independent state, but Washington opposes any attempt to take the self-governed island by force and remains committed to supplying it with weapons.
For their part, investors have no interest in finding themselves caught in the crossfire. As a result, some Taiwan firms have funneled more business toward the West in the midst of supply-chain decoupling that has resulted from the US-China trade war.
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Taiwan simulates attack from mainland China as island’s military conscripts begin extended service
Taiwan simulates attack from mainland China as island’s military conscripts begin extended service
The Taiwan cabinet has said that approved investment in mainland China from 1991 to 2022 reached US$203.33 billion, covering 45,195 projects. But last year, those investments dipped to a 22-year low of US$3.04 billion.
Among survey respondents, 44.2 percent planned to invest outside mainland China, and more than half of that total were looking to target Taiwan, while just over a third pointed to Vietnam.
Vietnam has been seen for the past decade as a “China-plus-one” alternative for multinational manufacturers.
And the fast-growing Southeast Asian country is thriving from a contentious US-China trade environment, S&P Global Market Intelligence’s former Asia-Pacific chief economist, Rajiv Biswas, said in an October commentary.
Higher US tariffs on Chinese exports have “driven manufacturers to switch production of manufacturing exports away from China and towards alternative manufacturing hubs in Asia”, including Vietnam, he said.
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