Taiwan cashes in on trade war: report

Capital fleeing can re-energise its bland investment market.

The Taiwanese economy is predicted to expand by 2.6% YoY in Q3 2019 from 2.4% YoY in Q2 as the country benefits from capital outflow brought about by the ongoing US-China trade war, according to Natixis.

Fleeing capital from the trade war can re-invigorate Taiwan’s once-lacklustre investment market, Natixis noted.

Exports have recently improve despite downturns caused by the trade war, with the contraction in Mainland China tapering to -3% YoY in Q3 2019. US diversification also supplied rapid growth of 18% YoY in the same period.

Approved foreign direct investment (FDI) inched up 8% YoY YTD due to European firms in manufacturing and new energy. Outward foreign direct investment (OFDI) into ASEAN swelled 35% YoY YTD with the share rising to 20% in September 2019, an evidence that firms are echoing the New Southbound Policy, an initiative by the Taiwanese government to enhance its ties with Southeast Asia.

Operations of Taiwanese companies are coming back home with an approved amount hitting $27.8t (NTD622b) which amounts to 3.5% of the country’s GDP.

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