The amount of investment in Taiwan pledged by Taiwanese firms is forecast to surpass the NT$600 billion (US$19.11 billion)-mark in September under a program launched at the beginning of this year to encourage Taiwanese companies operating overseas to invest at home, the Ministry of Economic Affairs (MOEA) said Saturday.
The MOEA said the increase in investment by Taiwanese investors is expected to serve as a driver to the growth of Taiwan's gross domestic product (GDP) at a time when trade tension between the United States and China has sent global demand lower and affected many export-oriented manufacturers in Taiwan.
So far this year, 123 Taiwanese firms have planned to invest in Taiwan, bringing in about NT$568.2 billion in investment pledges under the MOEA's investment program, according to data compiled by the ministry.
After the investment pledges by the 123 firms, the MOEA said, more than 30 additional Taiwanese firms have filed applications to enroll in the program, an amount that is expected to top the NT$600 billion-mark by the end of September.
The MOEA launched the incentive program in January to encourage Taiwanese companies that have shifted all or part of their operations overseas in recent decades, especially to China, to invest more in Taiwan to avoid high U.S. duties on products made in China.
The incentives offered include easier access to bank loans and a simplified process for recruiting migrant workers, as well as services tailored to their needs.
The MOEA said the enthusiasm demonstrated by more and more Taiwanese firms to return home amid escalating trade tension between Washington and Beijing is expected to boost Taiwan's domestic demand as well as consumption in the second half of this year.
As early as early August, the amount of investment pledges made by Taiwanese firms at home topped the goal of NT$500 billion set by President Tsai Ing-wen (蔡英文) for the whole of 2019.
Data compiled by the MOEA showed that with more and more Taiwanese firms investing at home, fixed investment in Taiwan for the first half of this year rose 7.2 percent from a year earlier after inflationary adjustment. For the entire 2019, the year-on-year growth rate could hit 6 percent in real terms, the highest growth since 2011, the ministry said.
In mid-August, the Directorate General of Budget, Accounting and Statistics raised its forecast for Taiwan's GDP growth for 2019 to 2.46 percent, up 0.27 percentage points from its earlier estimate made in May, citing increased investment in Taiwan by local suppliers looking to steer clear of the global trade disputes.
On Thursday, the MOEA approved applications filed by the latest batch of five Taiwanese firms to invest NT$4.4 billion in Taiwan, which is expected to create 666 jobs.
The pledges made by the five companies boosted the total investment commitment value to NT$568.2 billion to add about 49,572 new jobs to the local market, the MOEA said.
Among the five firms, Tyntek Corp., the second-largest Light-emitting diode (LED) lighting component and sensor provider in Taiwan, is planning to invest more than NT$800 billion and hire an additional 60 workers to expand its production capacity in Miaoli, while it aims to cut its production in Wuhan in China's Hubei Province to lower the impact resulting from the U.S.-China trade friction.
In addition, Chiayi-headquartered LED lighting maker Beautiful Light Corp. has pledged to invest about NT$700 million in Taiwan to set up a new plant in Chiayi, which will introduce high-end technologies such as Artificial Intelligence of Things (AIoT), to upgrade its production and strengthen its competitive edge.
The investment by the lighting supplier is expected to create more than 450 jobs. (By Liao Yu-yang and Frances Huang)