Taiwan speeds up investment diversification away from mainland China amid cross-strait tensions

Name: US and Taiwanese officials discuss chip supply and ‘economic coercion’
Uploaded: 2021-12-23T11:00:31.000Z
Duration: 1 min 21 s
Description: US and Taiwanese officials discuss chip supply and ‘economic coercion’

Taiwanese investment in mainland China dropped by 14.5 per cent from a year earlier in the January-November period, with investment from mainland China down by 62.9 per cent

Taiwan investment in Association of Southeast Asian Nations countries, Australia and New Zealand increased by 115.6 per cent in the first 11 months of the year

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The pro-independence Democratic Progressive Party, led by President Tsai Ing-wen, initiated its New Southbound Policy to reduce its high reliance on the mainland since taking office in 2016. Photo: EPA-EFE

Frank Tang

Published: 7:00pm, 23 Dec 2021Updated: 9:37pm, 23 Dec 2021

Taiwan has accelerated investment diversification away from mainland China, placing an emphasis on managing exposure to its largest export and investment destination amid ongoing cross-strait tensions and changes to the global supply chain.

Investment in mainland China dropped by 14.5 per cent from a year earlier to US$4.79 billion in the first 11 months of 2021, according to data from Taiwan’s Ministry of Economic Affairs.

Investment from mainland China dropped by 62.9 per cent year-on-year to US$46 million, taking the accumulated total since 2009 to US$2.46 billion, with the funds mainly focused on wholesale and retail, electronics and banking.

“It shows growing caution because of the mainland’s business environment changes, China-US trade tensions and technological war,” the economic affairs ministry said on Monday.

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US and Taiwanese officials discuss chip supply and ‘economic coercion’

China has long viewed Taiwan as a breakaway province and has vowed to take control of the island, by force if necessary.

Beijing strongly upholds its one-China policy, highlighted by the recent tensions with Lithuania after the opening of a Taiwan representative office in Vilnius.

Taipei has tried to form an economic and security alliance with the United States and Japan, while seeking more business opportunities via its New Southbound Policy which aims to enhance cooperation and exchange between Taiwan and 18 countries in Southeast Asia, South Asia and Australasia.