Economy

Analysis: The Whys Behind Taiwan's Decline in New Investment to China

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By Joseph Wu/Ai Chi

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Taiwan’s investments in China hit a record low, with China receiving 0.86% of Taiwan’s new outbound investment in the first five months of 2026. Meanwhile, Taiwan’s overseas investment surged past US$35 billion, driven by TSMC and AI supply chains, marking a sharp shift from China’s dominance in the 2010s. TaiwanPlus spoke with Kristy Hsu, Director of the Taiwan ASEAN Studies Center at Taiwan’s top think tank CIER, to find out more behind the trend.

Mainland Investment Decline: Insights from Kristy Hsu

 

REPORTER:  

Around 2014–2015, Taiwan's investment in China had, in fact, already started to decline.

 

Kristy Hsu (Director, Taiwan ASEAN Studies Center, CIER):  

[Because China’s] investment environment and conditions had changed  

including issues such as rising wages.  

In addition, China itself was imposing  

increasingly strict workplace safety regulations.  

Chinese suppliers had also become direct competitors  

to Taiwanese companies, rather than the earlier situation  

where cooperation outweighed competition.