Trade war pushing Taiwanese firms back home, with reshoring raising island’s GDP growth rate
- Island government has approved 156 new investment projects this year, many relocating from China or opting to add capacity in Taiwan to avoid US tariffs
- US President Donald Trump has placed American tariffs on US$360 billion worth of goods made in China
When Tong Hsing Electronic Industries of Taipei decided to expand production of high-end packaging material for technology equipment, they initially talked about setting up a factory in China, but eventually “discarded” the idea because exports to the United States would be hit with tariffs resulting from the trade war between the two counties.
Tong Hsing is joining a wave of Taiwanese companies that have picked their homeland for factory expansion this year to avoid the trade dispute between China and the US, in turn, accelerating the island’s economic growth.
So far this year, the Taipei government has approved 156 Taiwanese companies to invest in their homeland, often after deciding against opening factories or adding to existing production in China.
The returnees won’t be a huge per cent of GDP, but there’s still an effect of moving it forward and creating jobs
They are, understandably, keen to avoid US tariffs on US$360 billion worth of goods made in China, including by firms headquartered offshore, officials and analysts said.
The NT$703.4 billion (US$23 billion) approved for their investments is enough to raise Taiwan’s 2019 gross domestic product (GDP) by a detectable amount, according to the island government.
“This trend of course will raise the GDP and employ people – that’s beyond a doubt,” said Ho Kun-sung, chief operating officer with the Taiwan economic affairs ministry’s Invest Taiwan office. “The returnees won’t be a huge per cent of GDP, but there’s still an effect of moving it forward and creating jobs.”