Taiwan firms critical to 'non-red' regional supply chain: minister

05/15/2019 10:12 PM
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Minister without Portfolio Kung Ming-hsin (龔明鑫) / CNA file photo
Minister without Portfolio Kung Ming-hsin (龔明鑫) / CNA file photo

Taipei, May 15 (CNA) Taiwan companies are likely to play a critical role in the development of a "non-red supply chain," as the government has been offering incentives for overseas-based Taiwanese firms to return home, Minister without Portfolio Kung Ming-hsin (龔明鑫) said Wednesday, referring to a supply chain outside China.

Speaking at an economic forum held by the Taiwan Institute of Economic Research (TIER) on the economic outlook in Asia, Kung said an increasing number of China-based Taiwanese firms are looking to move at least part of their production back to Taiwan amid an escalating trade war between the United States and China.

Meanwhile, some Southeast Asian countries have been contacting the Taiwan government, hoping Taiwanese firms in China will shift some of their investments there, Kung said.

With the relocation of Taiwanese manufacturers back home and to Southeast Asian countries, the development of a "non-red supply chain" in the region will be strengthened, Kung said.

In January, the Ministry of Economic Affairs (MOEA) put forth an incentive package to encourage overseas-based Taiwanese companies, particularly those in China, to return home.

The incentives include better access to bank loans, a simplified process for recruiting migrant workers, and services tailored to the companies' needs.

According to MOEA data, 52 Taiwanese companies operating abroad have already pledged this year to bring back NT$279.5 billion (US$8.99 billion) worth of investment amid worry over the trade tensions between China and the U.S.

The 52 firms are expected to create more than 27,000 new jobs in Taiwan and their pledges have topped a goal set by the government to encourage NT$250 billion worth of investment by overseas-based Taiwanese companies, the MOEA said.

President Tsai Ing-wen (蔡英文) raised the 2019 goal to NT$500 billion last week.

Against that background, Taiwan will become a critical part of a regional chain, as the marginalization of suppliers outside China's "red supply chain" will end, Kung said.

In response to Kung's comments, Hsu Sheng-hsiung (許勝雄), chairman of the Third Wednesday Club, said he was delighted to see the Taiwan government aiming to build a larger manufacturing cluster in country, with the return of Taiwanese companies, which will have a positive effect on the economy.

Taiwan, however, is still faced with the so-called "five shortages"-- land, water, electricity, skilled workers and manpower -- which have been a persistent problem in the industrial sector, said Hsu, whose group of business leaders usually meet on the third Wednesday of every month.

The government must come up concrete solutions to solve these problems, otherwise its goals will be no more than empty promises, he said.

(By Pan Tzu-yu, Tsai Peng-min and Frances Huang)


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