Taiwan’s outward investment shifts away from China

Significance

China’s share in Taiwan’s global outward FDI has also dwindled from 64% to 18% during the same period. Taiwan’s investment shift away from China to other locations is helping reconfigure the global division of labour and undermine China’s economic prospects.

Impacts

• Chinese and foreign companies will have to adjust as supply chains move out of China and rebuild elsewhere.
• China will lose tax revenues as Taiwanese companies stop operating on the mainland.
• China will lose export trade volume as Taiwanese manufacturers of export goods set up elsewhere, undermining the country’s economic growth.