Taiwan is one of the best investment destinations for anyone looking to set up business in Asia. It has a positive relationship with the U.S., a strong commitment to democracy, and excellent working conditions — three factors that give it a significant economic advantage over China.
Relationship with the U.S.
In 1979, Taiwan and the U.S. signed the Taiwan Relations Act (TRA), which strengthened relationships between the two nations. To this day, the U.S. is the most trusted partner of Taiwan, supporting its democratic society and military.
In return, Taiwan acts as America’s partner in securing the stability of the region plagued by Chinese aggression. Given that the U.S. and China are both locked in an intense trade war, American think tanks predict bilateral relations will become stronger and more expansive, covering all areas ranging from trade and travel to security.
“[An] example of enriching the bonds [between the two nations] was the inclusion of Taiwan in the U.S. Global Entry Program in November 2017. This allowed for Taiwanese passport holders, including hundreds of thousands of tourists and businessmen each year, to expedite their entry into the United States, five years after Taiwan joining in the U.S. Visa Waiver Program,” according to The National Interest.
Taiwan has always honored the ideals of democracy, liberal society, and the free market, unlike authoritarian China. As a result, foreigners planning to set up business in the Far East will do better by choosing Taiwan rather than opening shop in China, where the Communist Party watches your every move. The Party, through its district offices, will seek to limit your business expansion in order to favor local enterprises.
On top of that, opening up in Taiwan means that you will face fewer barriers while trading with the U.S. and its allies.
Better destination for employees
If you wish to attract top-notch talent, your employees should be made to feel comfortable living in the region. In this regard, Taiwan wins hands down against China.
“Taiwan holds first place in the Quality of Life and Personal Finance Indices, impressing with the quality and affordability of its healthcare and the enviable financial situation of expats living there. The Asian Tiger scores second place in the Working Abroad Index. Over one-third of expats in Taiwan (34 percent) are completely satisfied with their jobs, more than double the global average of 16 percent. Expats are similarly enthusiastic about their work-life balance (30 percent) and job security (34 percent),” according to InterNations.
In China, the employees would have to deal with a censored online landscape and continuous monitoring by authorities as potential foreign spies. In contrast, employees can live their life any way they like in Taiwan, as guaranteed by its constitution.
Top investment industries
Taiwan is one of the global leaders in auto parts manufacturing. As such, this is one industry that offers a huge potential. With America trying to cut down on its reliance on Chinese imports, Taiwan stands to benefit by increasing its share of auto parts exports to the U.S.
Another major factor that bodes well for the Taiwanese auto parts industry is that the average age of cars and light trucks in the United States was estimated to be 11.7 years in 2017 compared to just 9.6 years in 2002. New car sales in 2017 declined for the first time since the Financial Crisis. This essentially means that Americans are using their cars for longer periods. As such, the demand for auto parts will rise due to an increase in car repairs and maintenance.
Other industries to consider investing in include IT hardware, medical equipment, consumer electronics, and machinery. Taiwan has good infrastructure, a talent pool, and experience in these industries, where they play a leading global role.