Taiwan managed to attract US$6.903 billion in foreign direct investment in the first half of this year, with the United States as the top source of inbound investment, according to statistics released by the Industrial Development Bureau (IDB).
From January through June, American companies invested US$1.858 billion in various local investment projects, making the U.S. the biggest foreign investor in Taiwan.
Japan came in second, injecting US$906 million into a variety of new ventures here, while Australia ranked third by pumping US$442 million into Taiwan during the six-month period.
The IDB data also showed that the retail and wholesale sector and the biomedical and pharmaceutical industries drew the largest amount of foreign capital during the period.
To attract more foreign investors, IDB officials said, the government will put more emphasis on luring overseas strategic investors to buy stakes in local corporations.
The following are excerpts from a special report in the Monday edition of the Economic Daily News on the government's new strategies to promote inbound investment:
The share of foreign direct investment has been relatively low in domestic capital formation. According to the United Nations data, foreign direct investment in Taiwan averages about US$3.6 billion annually.
To improve such a deficiency and accelerate local economic development, the Ministry of Economic Affairs (MOEA) has decided to adopt four new strategies to woo investors from around the world.
The ministry is hoping to draw at least US$10 billion in investment from foreign business groups or Taiwanese expatriates and NT$50 billion (US$1.67 billion) in investment from China-based Taiwanese businesspeople, commonly known as "Taishang," next year, MOEA officials said.
"We intend to bring in an estimated NT$367 billion (US$12.23 billion) in overall inbound investment in the coming year," said one of the officials.
To realize the goal, the official said, four new strategies will be adopted to lure inbound investment:
First, the ministry will work with accountants, lawyers and investment bankers to woo foreign strategic investors to buy out local companies or form joint ventures.
Second, active steps will be taken to woo China's flagship enterprises to invest in Taiwan. Since Taiwan opened its doors to Chinese investors, their accumulated investment has totaled a mere US$298 million. The ministry hopes its new focus can help lure more investors from the other side of the Taiwan Strait.
Third, the ministry will organize more roadshows in major countries around the world to persuade foreign conglomerates to set up regional logistics and financial management headquarters in Taiwan.
Finally, the Council for Economic Planning and Development will come up with a comprehensive package of incentives within one month to encourage "Taishang" to invest at home. The incentives will include easing restrictions on the hiring of migrant workers and halving tariffs on machinery imports.
In the past, the government tended to target investment in the manufacturing sector, but in the future, special emphasis will be placed on the service sector, particularly in the food and beverage, medical tourism, logistics, music and digital content, and conference and exhibition sectors.
Efforts will also be made to attract investment in urban renewal, Chinese-language e-commerce, Wimax, and venture capital matchmaking platforms and also to recruit more foreign students.
Ministry officials said service industries have become the backbone of the local economy, accounting for 69.3 percent of gross domestic product (GDP). The number of people working in the service sector has reached 6.05 million, or 58.9 percent, of Taiwan's employed population.
Because service industry development can help boost domestic demand, improve income distribution, narrow the gap between urban and rural areas and upgrade overall living standards, the officials said, investment in the sector should be encouraged at a time when the global economy is in the doldrums.
Meanwhile, the ministry will also take steps to stimulate private investment, including easing restrictions on use of land lots in industrial parks in northern Taiwan. (Sept. 3, 2012).
(By Sofia Wu)