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Taiwan investment in southern Asia surpassed China for 1st time in 2022

Taiwan's economic minister says development due to New Southbound Policy

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Taiwan economic minister Wang Mei-hua.

Taiwan economic minister Wang Mei-hua. (CNA photo)

TAIPEI (Taiwan News) — Taiwanese investment in southern Asia overtook that in China for the first time in 2022, Taiwan’s Economic Minister Wang Mei-hua (王美花) has said.

Taiwanese investments in Southeast and South Asia reached US$5.2 billion (NT$162.6 billion) last year, while US$5 billion flowed into China, Wang said in an interview with Nikkei Asia. "It's the very first time in 2022 that Taiwanese investment in Southeast Asia and South Asia actually outpaced (that going to) China," she said.

"We think the trend will only continue because of the push from U.S.-China trade tensions," she said. Wang added this was a major accomplishment for President Tsai Ing-wen's (蔡英文) New Southbound Policy, which aims to reduce economic dependency on China by shifting to Southeast Asia.

Taiwan's primary tech suppliers began distancing themselves from China after the trade war between Washington and Beijing intensified in 2018. Since then, the U.S. has set its sights on Taiwan and Southeast Asian nations including Vietnam, Thailand, and India as more stable locations for investment and trade.

Wang pointed out that investments in Southeast Asia and India by Taiwanese companies totaled US$4.3 billion in the first nine months of 2023, compared with just US$1.26 billion for China in the same period.

"After the U.S.-China trade war, discussions about cybersecurity-related electronic products, ranging from servers to networking products, have emerged," Wang said. Appeals from American and European customers to decouple from China will only further reduce Taiwan’s dependency, the minister added.

However, Wang said, "We foresee the means of economic pressure from China will only increase and won't decrease."

China has previously banned Taiwanese seafood and agricultural products multiple times over the past three years as a form of economic coercion.