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By Chen Yu-fu and Hollie Younger / Staff reporter, with staff writer
Taiwanese investment in China fell by 59 percent last year from 2024, Straits Exchange Foundation (SEF) Secretary-General Luo Wen-jia (羅文嘉) said in an interview yesterday with the Liberty Times (sister paper of Taipei Times).
It fell a further 30 percent in the first half of this year, with 360 businesses returning to Taiwan to invest as of last month, he said.
The Directorate-General of Budget, Accounting and Statistics has forecast that Taiwan’s GDP growth this year would reach 11.05 percent, while China’s GDP only grew by about 4 percent in the first half of this year.
Photo: George Tsorng, Taipei Times
About 20 years ago, Taiwanese businesses were rapidly expanding investments in China, using cheap local labor and land to manufacture goods to be sold across the world, Luo said.
However, in recent years, Taiwanese businesses have continued to pull away from China, as its economy struggles with contracting investments and consumer spending, he said.
Most international organizations believe that official data released by the Chinese Communist Party (CCP) must be taken with a grain of salt, as Chinese authorities may withhold information to inflate the figures, Luo said.
China is not like many democracies where information is fully transparent, but instead it selectively releases information, he said, advising observers to view the data with some skepticism.
Data do show that China’s economy is facing serious hardships — a trend that has continued for many consecutive years, Luo said.
Moreover, China’s domestic consumer market is struggling, as even first-tier cities are seeing a continually shrinking consumer spending, affecting restaurants, bars and various industries across China, he said.
The CCP government relies on large subsidies to reinvigorate consumer spending, but to limited effect, Luo added.
Domestic political parties, politicians and pundits urging people to invest in China for the “great rejuvenation” likely would not invest their own money there or buy China-related stocks, he said.
Relying solely on a market that can be shut down at any time carries substantial risk, he said.
The CCP’s 15th Five-Year Plan intends to attract Taiwanese businesses to invest in China with some preferential measures for Taiwan.
These measures can be cut off at any time, as they are related to the CCP’s “united front” work, he said, warning that those who invest in China and believe the CCP’s promises they could make money from the ”great rejuvenation” could stand to lose everything.
