Taiwan foreign investment nosedives, to just above MSAR

Traffic drives along a road in Taipei

Taiwan’s annual foreign investment has dropped steadily over the last decade, placing the island state just above Macau in the list of main Asian economies that attract foreign investment, reports the Taipei Times.
Annual foreign investment in Taiwan averaged USD4.3 billion annually between 2008 and 2014. According to the Statistics and Census Service (DSEC) Macau’s inward flow of foreign investment amounted to MOP26.31 billion (USD3.29 billion) in 2014.
While Macau’s investment has dipped over the last few years, it has steadily risen on aggregate over the last 15 years, with a notable increase in 2010 when it more than tripled from the previous year.
In contrast, Taiwan’s foreign investment trends indicate a structural issue with the island’s economy. Between 2001 and 2007, annual foreign investment in Taiwan totaled around USD5.6 billion, but then fell to an annual USD4.3 billion between 2008 and 2014.
Foreign investment in Taiwan reached a low point in 2011, when the annual figure was the second lowest of any nation in the world, according to the Taipei Times. In 2014, it was the fifth lowest.
Taiwan’s economic woes are compounded by new fiscal data. Last year the economy grew by only 0.85 percent, suppressed by a 10.8 percent contraction in exports. Exports fell by 13 percent in January, reminiscent of the country’s exceptionally poor performance during the 2008 financial crisis, when exports declined for 14 consecutive months.
According to the Taipei Times, this dwindling international investment is a result of Taiwan’s inability to compete on a global playing field, which has resulted in long-term capital outflows from the country.
However, while investment has nosedived, Taiwan maintains a relatively large capital surplus. According to a December 31, 2014 estimate by the CIA World Factbook, the island state retained around USD66.29 billion in stock of foreign investment, compared to Macau’s MOP218.87 billion (USD27.35 billion) in stock by end-2014. Staff Reporter