FDI deficit will hold back Taiwan economy

Subject

Foreign investment in Taiwan.

Significance

Taiwan is one of the least attractive investment destinations in East Asia, the latest UNCTAD data show. Its inability to attract foreign direct investment (FDI) hampers Taiwan's ability to compete in international export markets and to generate jobs at home.

Impacts

• The next government will focus on strengthening economic relationships with countries other than China.
• Demographic pressures will constrain Taiwan's domestic market potential for the foreseeable future.
• A skilled but low-cost labour force and well-established industrial clusters still count in favour of Taiwan's manufacturing sector.