Taiwan Manufacturing Group Downgrades China's
Investment Climate
The powerful Taiwan Association of Electric and Electronics
Manufacturers issued its first relative downgrade of China's
manufacturing investment climate in the past four years.
Reasons it cited for the downgrade were severe energy
shortages, and social friction caused by China's average
annual income per person going over US$1,000 per year.
However, the association said that there had been improvement
over the past years, and said that there is a chance that
the Chinese economy is "crouching first before an
upward leap." The report said that credit tightening
by the administration of Premier Wen Jiabao had slowed
growth.
In the past few days, Shanghai has announced that it
will shortly lift electricity
use restrictions.
Their report said that east China is still the best region
for Taiwan investments, but that north
and northeastern
China had shown strong improvement. Recently, Taiwan companies
have set up manufacturing in northeast China as an export
site for eastern and central European markets.
In north China, Taiwan investments in the city of Qingdao
have risen 33% over the past year.
The report said that government officials in east and
north China had acted aggressively in bringing investments
into their respective regions. It was more critical of
western China where the Chinese central government has
placed more emphasis on investment. The report said that
most local officials there were waiting for the perfect
investment deal, like "a prince on a white horse."
Traditionally Taiwan manufacturers have been early investors
in developing countries and regions throughout China,
Asia and eastern and central Europe which offer low labor
costs. When wages reach a certain level, they then gradually
fade out their investment. This has not been the case
in China, where the same language and culture, and promising
large market have kept them there.
In spite of the political differences, Taiwan manufacturers
have played a pivotal role in China's development, investing
more than US$130
billion.
The powerful group is effectively an independent lobbying
group with the Taiwan government, and also with China.
Its pro-industrial stance in Taiwan often put it at odds
with the political goals of the Chen Shui-bian administration,
and it has been an effective lobbying group with the Chinese
central government and local Chinese officials. For this
reason, it is one of the relatively few organizations
whose voice is listened to and respected on both sides
of the Taiwan straits.
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