April 12, 2024

New Southbound Policy investments top those in China

  • By Chung Li-hua and Jake Chung / Staff reporter, with staff writer

The nation’s commercial investments in New Southbound Policy nations have exceeded those in China for two consecutive years and the gap is expected to widen, the Executive Yuan’s Office of Trade Negotiations said.

Authorities last year approved US$5.54 billion of investments in emerging nations in Southeast Asia, up 5.15 percent year-on-year.

The investments were primarily concentrated in Singapore, Vietnam and Thailand.

Photo: AFP

Foreign commercial investments in Taiwan from nations listed under the New Southbound Policy stood at US$2.53 billion, up 2.45 percent year-on-year, the agency said, adding that the primary nations making the investments were Singapore, Thailand and Malaysia.

The New Southbound Policy, introduced in 2016, is designed to enhance trade and exchanges between Taiwan and 18 nations — Australia, Bangladesh, Bhutan, Brunei, Cambodia, India, Indonesia, Laos, Malaysia, Myanmar, Nepal, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Thailand and Vietnam.

Authorities last year approved US$3.37 billion of investments in China, the lowest level since 2002 and down nearly 40 percent year-on-year, Ministry of Economic Affairs data showed.

The data also showed that Chinese investments in Taiwan last year stood at US$29.69 million, the lowest level in history.

Taiwan’s investments in nations listed under the New Southbound Policy, at US$5.27 billion, first exceeded investments made in China, at US$5.04 billion, in 2022, data showed.

Despite weak trade last year due to global inflation and reduced consumer spending, Taiwan’s total trade with nations under the New Southbound Policy was down 15.5 percent compared with 2022, at US$152.20 billion.

Despite a general decrease in trade, the ratio of Taiwanese exports to nations under the New Southbound Policy grew from 17.1 percent in 2020 to 20.9 percent last year, data showed.

The ministry said the nation’s trade surplus with nations under the New Southbound Policy last year increased by 10 percent compared with 2022.

The adoption of the China+1 strategy by international manufacturers to diversify and enhance supply chain resilience is the impetus for Taiwanese businesses to invest nations under the New Southbound Policy.

Taiwanese overseas investments last year focused on electronics manufacturing in Vietnam and India, printed circuit board manufacturing in Thailand, shoe manufacturing and textiles in Indonesia, and renewable resource industries primarily based in Thailand and Indonesia.

The ministry said that future efforts would seek to apply Taiwan’s advantage in digital technologies to further enhance hardware, aiming to establish Taiwanese companies as digital giants in the region.

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