TAIPEI (Taiwan News) — After years of decline, China now accounts for less than 1% of Taiwan’s outbound investment and is on track to hit a record low this year.
Outbound investment excluding China more than doubled in the first five months of the year, while investment in China continued to shrink, per Liberty Times. As a result, China’s share of Taiwan’s total outbound investment fell to 0.86%, reflecting a shift among Taiwanese firms toward risk management and operational resilience.
According to the Ministry of Economic Affairs, Taiwan’s total outbound investment reached US$35.92 billion (NT$1.13 trillion) in the first five months of the year. Investment excluding China totaled US$35.61 billion, up 133.94% from a year earlier.
Major investments included a US$30 billion capital injection by TSMC into its overseas subsidiary and US$500 million investments by Wiwynn and ASUS in overseas operations. Meanwhile, investment in China totaled US$310.3 million, down 32.3% year-on-year.
Liu Meng-chun (劉孟俊), director of the First Research Division at the Chung-Hua Institution for Economic Research, said China’s weak domestic demand is driven by structural factors unlikely to improve quickly, according to Liberty Times. He said the property downturn has eroded household wealth.
Liu said high youth unemployment has undermined income expectations and spending power. He also cited China’s aging population as a long-term drag on consumption.
Jivan Huang (黃健群), chief of mainland China affairs at the Chinese National Federation of Industries, said Chinese authorities have also become more selective in attracting foreign investment, favoring industries with strategic importance, advanced technology, or control over key components, Liberty Times reported. Meanwhile, Taiwanese businesses are taking a more pragmatic approach to assessing the risks of entering the Chinese market.
Taiwanese investment in China peaked during the administration of former President Ma Ying-jeou (馬英九). Annual investment exceeded US$10 billion in six of his eight years in office and reached a record high of US$14.6 billion in 2010, accounting for roughly 83.8% of Taiwan’s total outbound investment.
