Taiwan’s growth and investment are restricted by five scarce resources — land, water, power, manpower and talent.

The News Lens
Date: 2018/04/14
By: Timothy Ferry, Taiwan Business TOPICS Magazine

Photo Credit: Reuters/達志影像

The “Five Shortages” refers to Taiwan’s lack of sufficient land, water, power, manpower, and talent to meet its need for continuing economic growth. The term was first coined by the Chinese National Federation of Industries (CNFI) in its 2015 white paper, and the umbrella organization of Taiwanese manufacturing associations continues to call upon the government to improve the situation, citing concerns over Taiwan’s declining Foreign Direct Investment (FDI), sluggish GDP and wage growth, and other indications of economic malaise.

Wang Jiann-chyuan (王健全), vice president of the Chung-Hua Institution for Economic Research (CIER), says that FDI adds dynamism to the economy by introducing new business models and offering what are often high-skilled, high-paying jobs. Recent M&A activity in Taiwan, including U.S.-based Micron’s acquisition of local memory maker Inotera Memory for US$4 billion, boosted total FDI to US$11 billion in 2016, the largest influx since 2007’s US$15 billion. The FDI figure for 2017 of US$7.5 billion was also boosted by M&A activity, according to the Investment Commission under the Ministry of Economic Affairs (MOEA).

Yet Taiwan’s FDI last year still trailed that of Vietnam, which attracted US$12.6 billion. It also fell far short of that of Singapore, which garnered a huge US$61.5 billion, according to the World Bank. Taiwan’s FDI in 2017 actually surpassed Hong Kong, which saw a sharp decline from its 2016 figure of US$44.45 billion to attract only US$4.14 billion.
[FULL  STORY]