10% of Mainland Investments Remitted to Taiwan

Forbes reports 10% of all money invested in China by Taiwanese companies is remitted back to Taiwan. Forbes reports:

Companies listed on the Taiwan Stock Exchange and GreTai Securities Market had remitted home earnings equivalent to 10.30 pct of their cumulative investments in China as of the end of the first quarter to March, the Financial Supervisory Commission said.

The FSC could not pinpoint a starting point for the tallies as they take into account investments made by companies before and after their listings.

As of the end of March, listed companies had brought home from the mainland a cumulative, combined 73.9 bln twd, up by 10.3 bln from the end of 2007, it said.

The companies had cumulative, combined investments on the mainland of 717.6 bln twd as of the end of March - down by 14.5 bln from end-2007.

Of course there has been ongoing debate in Taiwan about the benefits accrued in Taiwan by investing in the Mainland. Many people here feel that this negatively impacts Taiwan's economy as it takes jobs away from Taiwanese people. As an example, many taxi drivers I speak to are ex-employees of companies that moved to the mailand and are bitter that there were no jobs for them. However, the structure of Taiwan's economy is changing and has been changing over the past few years. A 2006 Taiwan Review article noted:

According to the Directorate General of Budget, Accounting and Statistics of the Executive Yuan, in 1981 the service sector accounted for 47.23 percent of Taiwan’s GDP, while the industrial sector did so for 45.47 percent, 90 percent of which was manufacturing. In 2005, services had beefed up to 73.5 percent of GDP, nearly the same as those of developed countries like Germany and Japan, and it is expected to reach 76 percent by 2015.

It is true that many people in the manufacturing sector have lost their jobs. But the younger generation are finding more employment opportunities in the service sector or non-manufacturing based industries (e.g. IC design). Financial Services are another area where people are finding more opportunites. The China Post reported that Taiwan is aiming to become Asia's financial center. The China Post said:

The Economic Daily News quoted Chen Shu, director-general of the Financial Supervisory Commission, as saying that after incoming President Ma Ying-jeou's government is inaugurated Tuesday, he will give priority to building Taiwan into the Asia-Pacific financial center.

"During my four-year term, I will draft short-term, mid-term and long-term plans for building Taiwan into the Asia-Pacific financial center," the paper quoted Chen as saying.

Even if Taiwan doesn't manage to become Asia's financial center, the service sector opportunities are growing and, any money remitted to Taiwan from their investments on the mainland should be beneficial to the economy.

Article 1: Taiwan listed cos remit home 10.30 pct of cumulative China investments as of Q1
Article 2: Serve It Up!
Article 3: Taiwan sets sights to be a financial center