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TAIPEI, Sep 1 Asia Pulse - China's worsening investment climate and a series of government austerity measures to cool down the economy after the Beijing Olympics have emerged as a severe challenge to many Taiwan businesses that were pioneers in that vast market two decades ago, analysts said.
With China's investment conditions rapidly deteriorating due to the implementation of a string of a new policies relating to better labor protection, stricter land acquisition and more vigorous corporate tax laws, most Taiwan companies in that country have been driven to rethink their business development strategies, analysts observed.
According to the results of the latest survey conducted by the Taiwan Electrical and Electronic Manufacturers' Association among China-based Taiwan businessmen, China's 2008 index in terms of investment climate has dropped for the first time, while its index for investment risks has increased -- the first such negative development in China's investment sentiment.
During the 2000-2005 period, China posted a rise in the two areas, as the association's past surveys had found. In 2006 and 2007, both indexes grew year on year.
The sharp changes in the Chinese market have pushed more and more China-based Taiwanese investors to retool their development strategies, analysts said.
Many of them have shifted their operations to Southeast Asian countries and India -- reflecting an altered mindset among Taiwan businessmen that China is no longer the "sole" target of their investment projects, the analysts noted.
In the meantime, Vietnam has been listed by Taiwanese enterprises as one of their top 10 potential investment destinations.