Taiwan surpassed China, including Hong Kong, to become the biggest manufacturing site for local companies last year, as makers of traditional goods such as machinery and petrochemicals shifted production back home to cope with a US-China trade dispute, a survey by the Ministry of Economic Affairs showed.
The survey showed that 47.9 percent of orders received overseas were produced domestically last year, surpassing 46.7 percent in China. China had been the largest manufacturing base for local firms since 2015, when 48.6 percent of goods were made in China and overseas manufacturing totaled 55.1 percent.
The ministry attributed the change to an increase in orders in the traditional manufacturing sectors, of which more than 85 percent of overseas orders were produced domestically.
“Companies received abundant orders for traditional goods such as chemicals, rubber and plastics in the first half of last year, as higher crude oil prices propelled demand,” Department of Statistics Director-General Wang Shu-chuan told the Taipei Times by telephone.
Orders for other traditional goods, including base metals and machinery also strengthened, benefiting from a relatively good global economy, Wang said.
The trade dispute between the US and China that broke out in the second half of last year was the reason for the shift in production from China to Taiwan, because of high US tariffs on Chinese imports, the ministry said.
The survey also showed that 15.8 percent of Taiwanese firms running factories in China were considering adjusting or relocating their production lines to other regions.
Nearly half, or 49.2 percent, of those firms intended to shift production sites to ASEAN member states, while the remainder opted for Taiwan, according to the survey.
“Companies from high-tech industries such as information and communications technology, optical equipment and precision machinery prefer moving back to Taiwan,” Wang said, adding that labor-intensive industries prefer ASEAN, given the lower labor costs and bigger labor pool.
The ministry said that it expects the domestic production ratio to increase further.
Source: Taipei Times
Nina Lin (email@example.com)