With the rising cost of manufacturing in mainland China and the trade war between China and the United States, Taiwanese businessmen in mainland China began to return to Taiwan. Foreign media quoted the CRIF China Credit Institute survey, Taiwan-invested enterprises in the mainland’s interests are declining significantly, last year, the top 1,000 Taiwan enterprises in the mainland’s pre-tax net profit, about a big drop of more than one-fifth, and to see a new low in nine years, of which revenue growth of less than half, it can be seen that the era of cross-strait industrial co-prosperity has passed.
The report pointed out that about 30 years ago west into the mainland of Taiwan factories have earned huge profits, Taiwan Hon Hai in 1988 set up its first factory in the mainland, revenue in 1991 after the listing of its shares within 10 years, about 65 times to about 97.8 billion New Taiwan dollars (about 27 billion Hong Kong dollars), last year’s annual revenue of more than 5.3 trillion New Taiwan dollars (about 1.47 trillion Hong Kong dollars).
Executives of Taiwanese companies said that if the company wants to expand production, while cutting costs to expand market share, then it is natural to choose to manufacture in the mainland. CRIF’s analysis says that Taiwan’s wholly-owned enterprises in the mainland have experienced a structural collapse in their operations, and the era of cross-strait industrial prosperity is over.
The report points out that since the signing of the Cross-Strait Economic Cooperation Framework Agreement (ECFA) in 2010, Taiwan’s annual investment in the mainland has been falling. Since 2017, the amount of money remitted by Taiwanese companies from the mainland exceeds the number of remittances to the mainland.
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