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Published Date: 2024-08-21
Publication:2019.12
Principal Investigator:江文基Jiang, Wun-Ji
Researchers:許裕佳Hsu, Yu-Chia、李宜靜Li, Yi-Ching、蘇怡文Su, Yi-Wen、廖倍妤
Foreign
trade and economic activities serve as vital drivers of economic growth for
most Asian countries. Taiwan, Japan, and South Korea have faced deteriorating
trade conditions with their major trading partners, China and the United
States, finding themselves in a similar situation caught between the two
giants. This study aims to analyze the strategies on supply chain adjustment of
Japan and South Korea over the past decade and thus draw insights from their
experiences in adapting to changes in the global trade environment.
Firstly,
Japanese firms prioritize economic factors in their overseas deployment. The
production and sales of Japanese overseas subsidiaries primarily serve local
and neighboring markets. Despite territorial sovereignty disputes between China
and Japan, incidents like the Senkaku Islands dispute have not significantly
affected Japanese-owned enterprises' operations in China. However, there is a
deterrent effect on potential investments, prompting Japanese companies to
consider shifting towards Southeast Asian countries. The US-China trade dispute
has a relatively limited negative impact on Japanese businesses operating in China,
mainly affecting export-oriented enterprises shipping to the United States.
Over the next three years, India and ASEAN countries are the most attractive
destinations for Japanese manufacturing business development.
Additionally,
South Korea has adjusted its trade policies in response to several significant
international developments over the past decade, with the most eye-catching
trade adjustment policy during the 2008 financial crisis. This adjustment
policy has become the basic direction of South Korea's foreign trade policy
over the past decade, mainly focusing on enhancing the export capability of the
service industry, adjusting the structure of the manufacturing industry,
increasing the proportion of consumer goods exports, and strengthening international
cooperation in industries. The main idea of the South Korean government's
policy for expanding exports is to "increase the proportion of consumer
goods exports while still focusing on intermediate goods exports, without
relying solely on a single export item or sector." South Korean companies
exhibit relatively high compliance with government policies. Therefore, with
the adjustment of South Korean government policies and the implementation of
government support measures, changes in the production supply chain of
enterprises are gradually occurring. In light of recent US-China trade tensions
and Japan-South Korea trade disputes, the impact on South Korea has been
relatively minor.
Similar
to Taiwan, both Japan and South Korea have close trade ties with China.
However, facing changes in the international economic situation, Japan and
South Korea have gradually adjusted their layouts and government policies to
cope with the global trade landscap. While Japanese exports are increasingly
concentrated in mainland China, the United States, and ASEAN countries, the
growth in exports to the United States is particularly significant. South
Korea's exports rely on markets in China, ASEAN, and the United States, with
ASEAN's importance increasing significantly over the past decade. In contrast,
Taiwan's exports showed a trend of shifting reliance from China to ASEAN from
2009 to 2015, but the proportion of exports to China rapidly increased from
2015 to 2018. In 2018, China accounted for 28.81%, 19.51%, and 26.8% of exports
from Taiwan, Japan, and South Korea, respectively. If Hong Kong is included,
the proportion further increases to 41.19%, 24.24%, and 34.4%, respectively,
highlighting Taiwan's high dependence on. In terms of outward foreign direct
investment (FDI), over the past decade, Japan's foreign investment has mainly
targeted the European Union (28.22%) and the United States (25.99%), while
South Korea's top three destinations are the United States (22.38%), ASEAN
(13.07%), and the European Union (12.36%). In contrast, Taiwan's investment is
heavily concentrated in mainland China, accounting for 57.51%.
From
various perspectives, Taiwan's dependence on China is higher than that of Japan
and South Korea. Due to China's long-term unfriendly political stance towards
Taiwan and the short-term difficulty in easing tensions between the United
States and China, Taiwanese businesses should diversify their investment and
trade markets. Both Japanese and South Korean businesses have a relatively high
proportion of outward FDI in advanced countries in Europe and the United
States. In contrast, Taiwan's FDI in the United States and the European Union
over the past decade only accounted for 3.63% and 3.1%, respectively, with the
main investment targets being mainland China and ASEAN countries, indicating a
“defensive FDI approach”. Looking ahead, with rapid technological advancements
enabling automation in many manufacturing industries and minimal cost
differences in production across various regions, Taiwanese businesses should
adopt an “expansionary FDI approach” to invest in advanced economies and then
obtain emerging teconologies from those economies.
Based
on the above analysis, this study proposes the following recommendations for
Taiwanese government:
1.
The government should continue to
promote the signing of bilateral investment agreement (BIA) with important
trading partners to safeguard the interests of bilateral businesses.
2.
Keep up with market demand changes
and adjust the proportion of consumer goods production and exports while still
focusing on intermediate goods exports, without relying solely on a single
export item or sector.
3.
Respond to changes in the
international situation by encouraging Taiwanese businesses to diversify trade
and investment markets and adjust supply chain layouts.
4.
Taiwan should strengthen measures to
attract foreign investment. In addition to existing domestic policies, we
suggest: (1) encourage foreign companies to participate in government-led
research and development projects and provide relevant information actively to
those companies; (2) establish channels for complaints from foreign companies;
(3) establish a platform for policy suggestions and regulatory relaxation for
foreign companies.