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Supply chain shift, pandemic trigger fall in Taiwanese workers in China

05/21/2024 06:31 PM
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Shanghai's Oriental Pearl Tower. CNA file photo
Shanghai's Oriental Pearl Tower. CNA file photo

Taipei, May 21 (CNA) The number of Taiwanese working in China has been dealt a blow in recent years largely because of a slowdown in Taiwan's investment in China, rising operational costs in China, and the COVID-19 pandemic, experts said recently.

The number of Taiwanese nationals working in China (including Hong Kong and Macau) fell precipitously from 395,000 in 2019 to 163,000 in 2021, and rebounded only slightly in 2022, according to data compiled by the Directorate-General of Budget, Accounting, and Statistics (DGBAS).

The plunge followed slight declines in Taiwan's working population across the Taiwan Strait for six years in a row from 2014 to 2019, which hinted at some of the economic forces already in play that accelerated after the pandemic occurred.

Chen Chung-hsing (陳松興), an adjunct professor at Chinese Culture University's Graduate Institute of National Development and Mainland China Studies, said a key factor has been the diversification of capacity away from China.

Chen said many Taiwanese businesses have adopted "China Plus One" strategies in response to supply chain demands and reduced investment in China while relocating some of their capacity to Southeast Asian countries.

Demand for Taiwanese workers in China has decreased accordingly, Chen said. That has diminished the incentives for Taiwanese managers and technicians to work in China, leading to shifts in the number of Taiwanese with jobs in China and Southeast Asia.

Hsin Ping-lung (辛炳隆), an associate professor with National Taiwan University's Graduate Institute of National Development, said most Taiwanese who work overseas follow the movements of Taiwanese businesses.

Given that Taiwanese businesses no longer see China as their top investment priority and are relocating their operations to other places, Taiwanese managers are naturally following the trend, Hsin said.

Other factors driving this workforce relocation include Beijing's changing policies on foreign investment, the rising costs of doing business in China, and the U.S.-China trade and technology wars, he said.

These have all led to significant changes in where Taiwanese work overseas, evident in the decreasing number of workers going to China and the increasing number going to Southeast Asia, Hsin said.

DGBAS data showed that the number of people working in Southeast Asian countries was edging higher in the years before the pandemic and was rebounding faster than in China in 2022.

In 2013, the number of Taiwanese working in Southeast Asia surpassed 100,000, reaching 109,000. It rose to 113,000 in 2014 and 120,000 in 2019.

Even after plummeting to 40,000 in 2021 after COVID-19 hit, the number rebounded quickly to 71,000 in 2022, according to the DGBAS. Figures for 2023 are not yet available.

These many trends have led to the proportion of Taiwanese working in China falling from 62.2 percent of total Taiwanese working abroad in 2011, to 53.4 percent in 2019 and 37.5 percent in 2022.

Young people tuning out China

That trend is not likely to be reversed because economic and political trends are adversely affecting the interest of younger adults in taking jobs there.

"The attractiveness of China for young Taiwanese people to work has indeed declined," Hsin said.

Young Taiwanese no longer have any particular advantages in China's labor market, Hsin said, partly due to China's current economic situation and partly because young Taiwanese find it hard to accept the authoritarian political environment there, making it impossible for them to "just make money."

A 38-year-old man interviewed by CNA, who requested anonymity, said that during the COVID-19 pandemic, he got a job offer in Hong Kong.

He decided to pass up the opportunity, however, given the changes in the general mood there after the enactment of the Hong Kong national security law.

Another man, who graduated from National Chengchi University and moved to Shanghai for work after a stint in Taiwan, cited the city's vast job market as a reason for the move.

Though salaries in Shanghai are higher, the man said he faces higher living costs and work pressure and was concerned about tensions between Taiwan and China.

The DGBAS counts for overseas workers are estimates based on immigration and other records.

Any Taiwanese who the DGBAS established has remained in one country for more than 90 days or who has other records confirming long-term employment overseas is counted as working abroad.

(By Lee Ya-wen and Evelyn Yang)

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