Singapore becoming magnet for investment from Taiwan to hedge tensions with mainland China
- Direct investment flows from Taiwan to Singapore reached S$7.21 billion (US$5.4 billion) in 2021 and S$6.1 billion last year, up from S$3.69 billion in 2020
- Singapore is seen as politically ‘neutral’ amid tensions between Taiwan and mainland China, which has long been a traditional location for Taiwanese investment
Taiwanese investment in Singapore has surged over the past two years as the city state has become a refuge for money to hedge against the risk of a military conflict with mainland China, according to official data and analysts.
In 2020, just S$3.69 billion (US$2.8 billion) in Taiwanese money reached Singapore’s enterprises, funds and other assets after only S$1.48 billion made it in 2019.
But direct investment flows from Taiwan to Singapore reached S$7.21 billion (US$5.4 billion) in 2021 and S$6.1 billion last year, according to Singapore’s Department of Statistics.
In Taiwan, what they have on their minds is a lot of uncertainty, given the tense relations with China
“In Taiwan, what they have on their minds is a lot of uncertainty, given the tense relations with China,” said Kent Chong, managing director at professional services firm PwC Legal in Taipei, who manages clients looking to take money off the island.
“There is anxiety on the part of their funds.”
Taiwanese investment funds, companies and wealthy individuals favour Singapore over other countries because they believe it is politically “neutral” with options for residency, if needed, Chong added.
The turn toward Singapore may have started because of strict coronavirus controls that “undermined business activities” in mainland China, said Wang Wei-chieh, a Taiwan-based foreign affairs analyst and inbound foreign service master’s student at Georgetown University.