Taiwan company production in China for U.S. market falls

06/30/2021 08:44 PM
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Taipei, June 30 (CNA) The production of Taiwanese enterprises in China for the U.S. market has been affected by rising trade and technology tensions between Washington and Beijing, the Ministry of Economic Affairs (MOEA) said Wednesday.

An annual survey conducted by the MOEA's statistics department indicates that 25.7 percent of products in export orders received by Taiwanese manufacturers and rolled out in China and Hong Kong in 2020, went to the U.S. a fall of 1.1 percentage points from a year earlier.

The ministry attributed the decline to growing trade disputes and technology competition between the U.S. and China, which prompted many Taiwanese manufacturers with overseas operations to relocate production from China in a bid to ameliorate the impact of such tensions.

According to the survey, which collected 2,768 valid questionnaires, while Taiwanese firms with production lines in China and Hong Kong lowered the ratio of production bound for the U.S. market, they sold 22.3 percent of their goods made in China in the same market.

In terms of industries, the MOEA said, electronics component and optoelectronics makers with operations in China sold 53.4 percent and 45.3 percent of their production in the Chinese market respectively, as many in the two industries serve as contact manufacturers, including flat panel makers, for clients in China.

Meanwhile, Taiwanese machinery and base metal manufacturers with operations in China shipped more than 40 percent of their products from China to the U.S. market, the MOEA said.

The survey found 24.0 percent of respondents sold their products in the markets where the goods were produced in 2020, the highest since 2010, up 2.5 percentage points from a year earlier.

The MOEA said the increase showed market proximity was more important for these Taiwanese exporters.

At the same time, the survey showed 70.1 percent of products were sold to third markets in 2020, down 3.5 percentage points from a year earlier. The remaining 5.8 percent sold their products back to Taiwan, the survey indicated.

The MOEA said machinery exporters sold 83.1 percent of their products, information communication technology exporters shipped 81.6 percent, and base metal exporters sold 77.1 percent to third markets.

According to the survey, 74 of respondents said they picked Taiwan as the top destination for production expansion in 2020, accounting for 55.4 percent of companies that expanded capacity in the year, in the wake of government taxation incentives and efforts to contain COVID-19, followed by 36.5 percent who chose members of the Association of Southeast Asian Nations bloc.

(By Liang Pei-chi and Frances Huang)

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