Taiwan’s Economy Is Breaking Away From China’s

22 March 2023

According to Taiwan’s Investment Commission, Taiwanese realized investment in China has plummeted, from U.S. $9 billion in 2017 to just U.S. $1.7 billion in 2022. As a consequence, China’s importance in Taiwan’s total outward foreign direct investment has diminished whereas other countries’ weight has increased.



The officially recorded investment data shows that China accounted for 34% of Taiwanese firms’ worldwide investment in 2022, followed by 31% of Southeast Asia and India, and 13% of the U.S. and Europe. This is in sharp contrast to a decade ago, when China accounted for over two-thirds of Taiwan’s global outward investment.

Taiwan’s official survey report in 2022 explained that the growing competition from local producers, rising labor costs, and difficulty in developing China’s domestic market are the main obstacles for Taiwanese firms doing business in China. While very real, these problems alone are insufficient to explain the extent and speed of the decline in Taiwanese investment in mainland China.

Taiwanese investment in China fell by over 50% from 2018 to 2019 alone. The timing strongly indicates that changing U.S. trade policies toward China played a significant role. The post-2019 investment cut was far greater than the investment declines of a decade ago that resulted from China’s wage hikes.

Paese: China| Taiwan
Decoupling| investimenti diretti esteri

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