Taiwan has been ranked as the 14th-best destination for investment in the latest U.S. Business Environment Risk Intelligence (BERI) report, down eight places from the previous report, according to the Ministry of Economic Affairs (MOEA), which cited massive military exercises launched by China around the island as having caused the drop.
Citing the third 2022 report released by BERI in December, the MOEA said, Taiwan received a total score of 53 points for profit opportunity recommendation (POR) — the overall indicator used by BERI to evaluate each country as an investment destination — compared with 58 in the second 2022 report released in August.
Switzerland was first with a score of 69, ahead of Norway (67), Canada (60), Denmark (59), and China (58), according to the latest BERI report.
In the Asian region, Taiwan took fifth place, trailing China (No. 5 globally), South Korea (No. 7), Singapore (No. 9), and Indonesia (No. 12), the MOEA said.
BERI releases evaluation reports three times a year in April, August, and December, reviewing the investment environment in 50 countries around the world from the perspective of multinational companies, according to the MOEA.
The American institution uses three main indicators to assess investment risk — operating conditions (operation risk), political risk, and foreign exchange/external accounts position (remittance and repatriation factor) risk, the MOEA said.
Taiwan scored 34 points in the political risk sub-category, down from 36 in the August report, while its standing in the sub-category fell to 42nd place from 36th worldwide and 10th place in Asia, the MOEA said.
According to the MOEA, BERI said the fall in the political risk factor largely reflected rising tension across the Taiwan Strait, in particular in the third quarter of last year, when China undertook military drills around Taiwan in a strong protest against a 19-hour visit by then U.S. House Speaker Nancy Pelosi in early August.
In the operation risk sub-category, BERI’s December report ranked Taiwan as the fifth-best place in the world, down from third in August, as the country scored 59 points, compared with 62 points in the previous report. Taiwan’s global ranking in the category trailed only the United States (66 points), Australia (64 points), and Canada and Switzerland (61 points), while being tied with Vietnam and Indonesia.
In terms of the remittance and repatriation sub-category, Taiwan scored 73 points in the December report, down from 76 points in August, and took third place, also down from second in August, the MOEA said, adding that Taiwan still occupied the top spot in the Asian region in the sub-category.
Despite its fall in BERI’s overall rankings in December, the MOEA said, Taiwan remains a popular destination for foreign investors as the country has cemented its status in the global semiconductor supply chain, and that rising political tensions did not deter them from coming to Taiwan.
Citing data compiled by the Investment Commission, the MOEA said approved direct foreign investments (FDI) for the first 11 months of last year soared by 84.71 percent from a year earlier, including a production and research and development center project of U.S.-based semiconductor equipment supplier Applied Materials in the Southern Taiwan Science Park, and a plan by the Netherlands’ extreme ultraviolet lithography (EUV) machine supplier ASML Holding to expand production in New Taipei.
The MOEA said that as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) had kicked off mass production of chips made on its advanced 3 nanometer process in Tainan in late December, more investments by its supply chain were expected to pour in.
In addition, the MOEA said, multinational drug developer Merck has pledged to invest US$600 million in Taiwan over the next five to seven years, while Dutch beer brand Heineken has reached an agreement in June to acquire a beer plant in Pingtung County to expand its production in the country.
Also in the 11-month period, export orders received by Taiwanese companies from the U.S., Europe, and ASEAN rose by 6.7 percent, 2.8 percent, and 19.9 percent, respectively, indicating that foreign buyers remained upbeat about Taiwan’s manufacturing capabilities and investment environment, ignoring weakening global demand and the COVID-19 pandemic, according to the MOEA.
Source: Focus Taiwan News Channel