Taiwan government mulls additional incentives for Taiwanese manufacturers to leave China

Taiwan government developing plan to help Taiwanese manufactures deal with trade war

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Tsai Ing-wen, left, inspecting scooter plant. (Image courtesy of Tsai Ing-wen's Facebook)

Tsai Ing-wen, left, inspecting scooter plant. (Image courtesy of Tsai Ing-wen's Facebook)

TAIPEI (Taiwan News) – The Taiwan government is mulling over a host of incentives to entice Taiwanese companies to move factories back to Taiwan from China, as the U.S.-China trade war heats up, the Nikkei Asian Review reported on Sept. 15.

Incentives include tax breaks and expedited processes for land acquisition, a government source told the Nikkei Asian Review.

The U.S.-China trade war is bringing about significant uncertainty for both businesses and markets, and giving pause for thought for Taiwanese businesses with manufacturing bases in China.

Although Taiwan Minister of Economic Affairs, Shen Jong-chin (沈榮津) said in Aug. that Taiwan's semiconductor sector should profit from the trade war, Taiwan's Yuanta-Polaris Research Institute said that the trade war will impact Taiwan because the two leading protagonists are significant trading partners for Taiwan, and that machine tool and electronic component industries are likely to be affected most.

The government official told the Nikkei Asian Review that the government is planning to propose a bill to the Legislative Yuan (立法院) as soon as this month.

The government is working through a plan to expedite land acquisition for industry, which can take up to five years due to procedures like environmental impact studies, the report said.

Taiwan Premier William Lai (賴清德) called on Taiwanese businesses to invest more in Taiwan on Sept. 17, at the opening of a new industrial park in Erlin Township (二林鎮), Changhua County (彰化縣).

Taiwan's Ministry of Economic Affairs (MOEA, 經濟部) announced last month a two-pronged plan to help industries affected by the U.S.-China trade war. The MOEA also added that it was working to address Taiwan's "five shortages," namely the lack of water, electricity, land, factories, and talent.

Major Taiwanese manufactures including Sercomm Corp., Delta Electronics, Compal Electronics, and Quanta Computer are reportedly planning to switch some manufacturing from China to Taiwan.

Shen said on Sept. 13 that at least two dozen Taiwanese companies are considering moving back to Taiwan, while statistics from the MOEA shows a distinct dip in inquiries by Taiwanese firms about setting up offices in China from Jan. to Aug. this year.

While some Taiwanese companies are thinking about returning to Taiwan, others including Delta Electronics, New Kinpo Group, and Merry Electronics have began to switch some of their Chinese manufacturing to Southeast Asia.