Taiwanese investment in China plunging due to U.S trade row

23, May. 2019

TAIPEI, NNA – Taiwanese investment in mainland China has slumped this year amid the U.S.-China trade dispute, while funds flowing into Southeast Asia have increased in line with the government’s “southbound” policy.

Approved investment in the mainland tumbled 45.5 percent on year to $1.4 billion in the January-April period, the Ministry of Economic Affairs said Monday, blaming the trade row for the drag on sentiment.

By comparison, Taiwan investment in China in 2018 dropped 8.1 percent to $8.5 billion, according to data from the ministry’s Investment Commission.

With the government’s New Southbound Policy (NSP) for the region, including South Asia and Oceania, approved outward investment in Southeast Asia in the first four months of this year rose 11 percent from a year earlier to $917 million, the data showed.

“Taiwanese companies are now rearranging their production bases and Southeast Asian countries are primary choices in fear of the unresolved U.S.-China trade dispute,” Yang, Shu-ling, the commission’s spokeswoman, told NNA.

The capital flow from Taiwan to 10 Southeast Asian nations fell 40.4 percent on year to $1.8 billion last year, according to the commission.

NSP countries as defined by the Taiwanese government are Australia, Bhutan, Cambodia, Indonesia, Malaysia, Nepal, Pakistan, Singapore, Thailand, Bangladesh, Brunei, India, Laos, Myanmar, New Zealand, the Philippines, Sri Lanka, and Vietnam.