TAIPEI (Taiwan News) — Taiwanese investment in China last year plunged by nearly 40% hitting a 21-year low, while Chinese investment in Taiwan dropped by over a third.

The Ministry of Economic Affairs (MOEA) said on Monday (Jan. 15) that total overseas investment from Taiwan for 2023 exceeded US$11.2 billion. This marks a 15.4% decrease compared to the previous year. Despite the decline, this figure still represents the third-highest annual amount in nearly 16 years.

In terms of Taiwanese investments in China, the approved number of investment projects from January to December was 328, representing a year-on-year decrease of 11.83%. The approved investment amount totaled approximately US$3 billion (NT$94 billion), marking a new low since 2002 and a decrease of 39.83% compared to the same period in 2022.

The MOEA said the top industries in terms of Taiwanese investment in China were electronic component manufacturing, wholesale and retail, professional scientific and technical services, health care and social services, and finance and insurance. The electronic component manufacturing sector accounted for approximately 25% of total investments, marking a year-on-year decrease of nearly 50%.

Chinese investment in Taiwan also declined significantly with the number of approved Chinese investments in Taiwan in 2023 only reaching 30, a decline of 34.78% from the same period last year. The investment was US$29.6 million, the lowest ever recorded, marking a decrease of 23.34% compared to the same period last year.

As for Taiwanese investment in other countries, the ministry said that in 2023, the approved number of overseas investment projects was 568, marking a 4.03% increase compared to the previous year. The total investment amount reached US$23.57 billion, a record high and a year-on-year increase of 136.67%.

This surge was primarily attributed to large-scale investment projects, such as TSMC's US$8 billion investment in the Arizona fab and a 3.5 billion euro investment in a German facility.

In addition, the ministry said that in 2023, the number of approved investment projects in New Southbound Policy countries was 233, marking an annual increase of 37.87%. The total investment amount reached US$5.54 billion, an annual increase of 5.15%, with Singapore, Vietnam, and Thailand receiving the largest investment outlays.

The ministry said that Taiwanese businesses are adjusting their global strategies by increasing investments in the U.S., Europe, Japan, and New Southbound Policy countries, seeking to diversify production risks.