Taiwanese businesses in China pessimistic, but not going anywhere: Survey

Taipei, March 11 (CNA) A majority of Taiwanese businesspeople in China are pessimistic about the country's economic future, but many still say they have no plans to reduce their investment over the next few years, according to a recent survey by the Taipei-based Chinese National Federation of Industries (CNFI).

In its 2023 survey of Taiwanese businesspeople in China, the CNFI said that that about 61 percent of respondents reported lower operating profits in 2022, including 20.8 percent whose profits dropped "significantly."

In contrast, only 29.6 percent of respondents reported higher profits, the business group said, though notably, the question focused on the period before China lifted its "zero-COVID" policyin January 2023.

Asked about the future of the China market, respondents were split about 60-40 between those with negative and positive outlooks.

Specifically, 9.5 percent of respondents said they were "very pessimistic" and half said they were "not very optimistic," while less than 10 percent felt "business as usual" and around 30 percent felt "optimistic" and "very optimistic," the survey results showed.

Analyzing the results, the CNFI said that amid heightened geopolitical tensions, many American and European firms had begun looking for additional suppliers outside China based on risk management considerations, which has impacted some Taiwanese businesses there.

In terms of cross-Taiwan Strait relations, 44.2 percent of respondents said they had had "some effect" on their business performance, while just over a quarter said they had "a major effect."

Less than 20 percent said cross-strait relations had "a small effect" on their business, while 10 percent said they had had no effect, the results showed.

Although many Taiwanese businesses have yet to lose orders because of cross-strait tensions, survey respondents expressed concern that a spike in tensions could drive western clients to prioritize suppliers outside China, the CNFI said.

Despite the respondents' relatively dour outlook on the future of the Chinese market, 67.9 percent said they had no plans to reduce their investment in China over the next 3-5 years, the CNFI said.

Meanwhile, less than 20 percent of respondents said they planned to reduce their investment in China, and around 10 percent said they planned to invest more in the country, the business group said.