Taiwanese companies’ investments in South and Southeast Asia exceeded investments in China for the first time in 2022. Economic Minister Wang Mei-hua (王美花) gave an exclusive interview with Nikkei Asia on Tuesday, calling this change an important milestone in President Tsai Ing-wen's (蔡英文) New Southbound Policy.

Taiwanese investment in South and Southeast Asian countries reached US$5.2 billion in 2022, exceeding the US$5 billion invested in China that same year. Taiwan's major technology companies have been accelerating diversification and building production capacity both within Taiwan and in countries such as Vietnam, Thailand, and India in the face of geopolitical turmoil.

Wang says that this trend has become even more obvious this year with investments in South and Southeast Asian countries reaching US$4.3 billion in the first nine months of 2023, while investment in China was only US$1.26 billion.

Wang says that with Taiwan’s presidential election fast approaching, Beijing is putting pressure on voters and attempting to use trade restrictions to coerce them into choosing its preferred candidate. Wang says that a Chinese investigation into alleged trade violations by Taiwan is scheduled to be completed the day before the election on January 13. She says that this is clearly a politically motivated date and that in every presidential election, China uses various methods to try to influence Taiwan. She adds that she expects China's exertion of economic pressure will only increase.

In August, the Chinese government accused Taiwan of violating the Cross-Strait Economic Cooperation Framework Agreement (ECFA) and threatened to suspend tariff reductions granted to Taiwanese products under the pact. Wang says that in 2022 Taiwan’s exports to China reached US$185.7 billion, though ECFA items were valued at only US$20.6 billion. She points out that if ECFA is terminated, the impact on Taiwan’s exports to China will be relatively small, but traditional industries such as agriculture will be the most strongly affected.

Beijing also recently launched an investigation into the Taiwanese company Foxconn, after its founder Terry Gou (郭台銘) announced his candidacy to run for president. Gou has since dropped out of the race.