HUNDREDS OF TAIWAN firms are leaving China. Policy decisions drive Taiwan investors out of China.

Hundreds of thousands of Taiwan firms are leaving China. Policy decisions drive Taiwan investors out of China.
On the morning of September 26, Taiwan manufacturers in Suzhou and Kunshan received a notice from the Jiangsu government informing them that power restrictions would begin at noon that day and they must stop production for four days.

The province had taken the decision the previous evening at a meeting that ended at 2300. “We had not expected the government to act in such a drastic way,” said a director of one of the manufacturers. “A few days earlier, there had been rumours of power cuts but not an order to shut down production.”

The cuts affected dozens of Taiwan companies in 10 provinces and sectors including makers of electronics, auto parts, IT and raw materials. They came at the busiest production time of the year, fulfilling orders for Christmas and Chinese New Year.

The cuts came after the closure of the educational cramming sector and the rectification of the property sector. “I do not know what Xi Jinping is thinking.” said one Taiwan investor. “What I do know is that Taiwan investors can no longer survive in China.”

Hundreds of thousands of Taiwan firms are leaving China because of these sudden policy decisions, rising costs and the intensifying trade and investment war between China and the U.S.

Since the 1980s, Taiwan has been one of the largest foreign investors in the mainland, with approved investments of US$191 billion. Among them was Foxconn, which set up its first factory in 1988. Its revenue grew to NT$97.8 billion (US$3.5 billion) in 2001 and NT$5.3 trillion in 2020.