According to the research results from the Center for Strategic and International Studies in Washington, D.C., 57.4% of surveyed Taiwanese companies are currently considering or in the process of withdrawing from China. In August of this year, the popular restaurant chain “Din Tai Fung”, which had been operating in the Chinese market for nearly 20 years, announced the closure of 14 stores in Northern China (including one in Xiamen) by the end of October.
“The Wall Street Journal” reported on September 18th that exploring how global industries may react when faced with the dilemma of relocating their operations from China or maintaining the status quo, the situation and choices of Taiwanese companies could serve as a precursor of sorts.
Over forty years ago, with the opening up of China, the country began attracting foreign investors, with Taiwanese people being among the first to establish factories on the mainland. Subsequently, Japanese, American, and European individuals also flocked in. Now, Taiwanese manufacturers, restaurant owners, and other business proprietors are once again at the forefront, but this time leading a trend of global companies pulling out of China.
According to a new study led by Scott Kennedy, an expert on Chinese issues at the Center for Strategic and International Studies, among approximately 610 Taiwanese companies surveyed at the end of last year, over 57% are either considering or in the process of relocating from mainland China due to the deteriorating business environment and the potential outbreak of a conflict in the Taiwan Strait.
The research indicates that Taiwanese companies could be likened to the “canary in the coal mine”, with their perspectives and actions foreshadowing how global companies may respond when facing the opposing forces of whether to relocate their businesses from China or stay put.
Overall, multinational corporations are withdrawing from China. Official data shows that in the first eight months of this year, foreign investment in Chinese factories, stores, and other physical assets decreased by 31.5%. This is a significant change for a country that has been a hub for foreign investment for many years.