TAIPEI (TVBS News) — Taiwanese businesses are capitalizing on the rapidly expanding Southeast Asian market, with significant investments flowing into the region, driven by the rising purchasing power of its consumers. In just the first two months of 2024, investments under the New Southbound Policy surged fivefold, highlighting a robust trend of economic engagement.
Rapid Investment Growth
From January to February 2024, Taiwan's total external investments amounted to US$4.64 billion, according to the Ministry of Economic Affairs. Notably, investments in Southeast Asian countries skyrocketed to US$2.55 billion, a dramatic annual increase of 574.74%, with Foxconn's investment in Singapore jumping by 170.98% from the previous year.
The region saw 59 investment approvals, a 136% increase from last year, with significant activity in Singapore, Vietnam, and Thailand.
Kuo Hsiu-hui, a business owner at Chain Ice Cream Shop, explained the consumer dynamics driving this trend. "Ice desserts and beverages are very popular among local consumers due to the lack of clear seasonal changes in Southeast Asia. The demographic dividend is promising, and young consumers are particularly open to foreign brands," said Kuo.
Strategic Shifts and Market Complementation
Emile Chang, director-general of the Department of Investment Promotion at the Ministry of Economic Affairs, emphasized the strategic importance of these investments.
"In the past few years, we have been focusing on countries included in the New Southbound Policy, with the electronics industry playing a pivotal role. The supply chain is highly diversified, from semiconductors to passive components and key hardware like motherboards," Chang noted.
The shift in focus from China to Southeast Asia comes amidst growing cross-strait tensions, with Taiwan redirecting its economic strategies to mitigate risks and leverage opportunities in emerging markets. The preferential treatment under free trade agreements further accelerates Southeast Asia's role in global economic growth, easing Taiwan's labor shortages and contributing to a more diversified economic landscape.