What has been hurting Taiwan's economy

According to data from this article (By Rong Futian), it is not investment in the mainland, it is investment in foreign (equity) markets
  • 知名政論家黃天麟認為,台灣企業投資大陸每年平均達180億美元(中國國家統計年鑑2004年台灣實際投資金額為31億美元,我國經濟部統計對大陸投資額2004年為69億美元,2005年為60億美元),造成台灣經濟失血,因此應該「積極管理」對中國投資行為才能提振台灣經濟。事實上,台灣失血非僅企業投資大陸一端,根據中央銀行統計,去年我國對外證券投資流出金額達358.07億美元,創下歷史新高。換言之,依據我國統計數據,我國資金投資國外證券為投資大陸的六倍,台灣失血的元兇不是大陸,而是自己。國內證券市場報酬不佳、國內外利差擴大,投資人移情別戀是國外證券投資額六倍於企業投資中國的原因。
  • A famous political commentator Huang tianlin believes, Taiwan's investment in China averaging $18bn/year (PRC Official Stats: $3.1BN, ROC Stats: $6.9bn for 2004, ROC stats $6bn for 2005), is the source of Taiwan's haemorrage, therefore it should be "Actively managed"
  • As a matter of fact, there is a much bigger end of such "haemorrage", according Central Bank stats, our investment in external equity markets totalled $35.807bn last year. i.e. according to our own firgure, such equity investment in markets (other than the mainland) is 6 times more than what we invest in the mainland. The culprit is not mainland China, it is ourselves. Return is unsatisfactory for our own stock market, is the main reason why we invest 6 times as much as money overseas than we invest in mainland China
My friend A, who is a senior investment banker based in HK, but spends 3-4 days per week in Taiwan, told me than it is more than that
  • In every single Asian market, the index has recovered the lost from the peak (i.e. pre-1997). Taiwan is the only exception. Taiwan's peak was close to 10,000. Today it is still under 7,000
  • Why? Taiwanese themselves do not want to invest in Taiwan companies. They are pessemistic of the economic policies
  • There are a lot of restrictions in Taiwan-based companies, such as (re-)investment in their profit centers in the mainland
  • Many are trying to relocate the assets to other markets (HK, Singapore, US), so that the money raised can be invested freely, with no government interferences. This could become a major business opportunity for investment bankers now. i.e. Hollowing out the Taiwan stock market



Anonymous said...

The leaders in investing outside of Taiwan is the DPP led by Chen Shuibian and his business cohorts, who contribute to his cause by making bribes through his son-in-law and First Lady Wu Shu-jen. In return for these cash contributions, Chen's administration makes it easier to move their money outside of Taiwan, contributing to the hollowing-out (taokong) of Taiwan society.

At the same time, Chen and his cohorts talk about the "dignity" and independence of Taiwan. Taiwan's independent judiciary should be allowed to investigate these charges, and Chen and these businessmen should all be put on trial which is broadcast live to the people of Taiwan, and around the world.

If they are found guilty, they should be executed, along with all of Chen's relatives.

The leadership of the DPP, beginning with Annette Lu and Su Tseng-chang then should also be investigated to see if they have helped in protecting Chen and his business cohorts from investigation for corruption. If they are found guilty, then they should also be tried and punished, and the DPP should be banned as a political party in Taiwan.

This is the only guarantee of Taiwan's dignity and democracy.

Anonymous said...

Okay, good to see we still have trolls around.

Sun Bin, isn't the problem then still Chinese investment? It's difficult to move money between Taiwan and China, thus companies now prefer to raise capital in the US, Japan, Singapore, HK and move it and profits wherever they want. So opening up restrictions with China would improve Taiwan's local investment market.

Sun Bin said...

yes, you are right.

1) taiwan companies need to levergae china for growth, to maintian competitive advantage (cost), and to access to a high growth market (mainland)

2) but they are not allowed to do that (or multiple obstacles were imposed by the green to strangle them). so the solution is to hollow out the assets and capital -- so that they are technically no long 'taiwan capital'

3) the problem is very serious now. it is also evident that most pan-green supporting businessmen (eg EVA's Chang) in 2000 now openly challenges Bian policies.

the reason for bian's (and lee tenghui's) being so scared of china interaction is not about security, as they said. it is about votes. they are worried that more interaction with the mainland will mean less support for their 'naitonalistic cause'. reasons: e.g. cross marriage across the strait wil shift the ethnic profile, more interaction/understanding means people in taiwan will understand mainland better, and will not believe that green's claims of the 600/800 missile threat are 'real'.

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