With investors’ return, Taiwan leading global supply chain: economist

Taipei,  Taiwan has become a leader in the global supply chain, as an increasing number of its overseas companies have been investing more funds at home, economists said Saturday.

Chang Chien-yi (張建一), president of the Taiwan Institute of Economic Research, said the government’s incentive program for Taiwanese investors, which was launched last year, has attracted the return of many top-tier Taiwanese manufacturers.

In their wake, second and third tier industries have also returned, helping Taiwan reshape its production structure, Chang said.

“The move by these Taiwanese investors to come home has helped Taiwan assume the position of commander, or the brain, of the global supply chain,” he said. “This development is expected to boost Taiwan’s status in global trade.”

The government’s incentive program, which includes subsidies for interest payments on bank loans, was rolled out at a time when companies were seeking to move some of their production out of China to avoid the United States’ increased tariffs on China-made products during a trade war.

As of Friday, Taiwanese companies had pledged returning investments of NT$989.1 billion (US$33.08 billion) under the incentive program.

Chang said that even those Taiwanese companies that maintain businesses in China and Southeast Asian countries have been able to use Taiwan as a hub while mapping out global expansion strategies to meet the needs of various clients.

Earlier this week, Minister without Portfolio Kung Ming-hsin (龔明鑫) said that NT$200 billion of the nearly NT$1 trillion in pledged returning funds had been invested in 2019.

An additional NT$325.3 billion is expected to be invested this year, accounting for 1.7 percent of the country’s NT$19 trillion gross domestic product (GDP) and boosting the economy, he told reporters.

Taiwan’s GDP grew 1.54 percent in the first quarter of the year, outperforming many countries at a time when the global economy was being ravaged by the COVID-19 pandemic, according to the Ministry of Economic Affairs (MOEA).

In comparison, the world’s largest economy, the U.S., grew only 0.3 percent, while China, the second largest, contracted 6.8 percent, the ministry noted.

Pledged investments by returning Taiwanese companies are expected to reach about NT$500 billion this year, which will strengthen Taiwan’s status in the global supply chain, according to the MOEA.


Source: Focus Taiwan News Channel

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