Most Taiwanese investors pessimistic about mainland-bound investment outlook

Taipei, Feb. 1, 2005 (CENS)--Over 50% of the respondents in a poll addressing Taiwanese merchants' views on the outlook for investments in mainland China expressed pessimism considering the surging raw-material, fuel and electricity costs, the economic cool-down measure, and supply shortage of electricity in the mainland.

Chinese National Federation of Industries, which represents the majority of Taiwan's manufacturers, conducted the poll in October last year on 3,000 of the island's 20,000 enterprises already registering their mainland-bound investments with the Investment Commission of the Ministry of Economic Affairs.

Only around 7% of the polled enterprises responded, with 84.6% and 78.8% of them feeling that rising electricity cost and power supply shortage would hurt their operations in the mainland, respectively. Around 57% of the respondents believed hiking interests on some selective loans, the core measure of the mainland's recent macro-economic control, would jack up their loan costs. Surging raw-material costs made 80% of the respondents believe that the factor would put a damper on their operations in the mainland.

In this poll, enterprises with investment costing over US$10 million accounted for 25.5%, higher than the 19.6% involved in a poll conducted in 2003. This suggested that Taiwanese investments in the mainland had grown bigger in size each case, the industries federation noted.