Taiwan Investment in China Falls 30% in First Half as 360 Businesses Return Home

Taiwanese investment in China has continued to retreat, with 360 businesses returning to invest at home by August, according to Lo Wen-jia, vice chairman of Taiwan’s Straits Exchange Foundation. He said investment fell 59% in 2025 from the previous year and dropped another 30% in the first half of 2026.

Lo contrasted Taiwan’s projected economic growth of 11.05% this year with China’s growth of just over 4% in the first half. He also questioned the reliability of China’s official figures, saying international institutions often view them as incomplete because information is selectively disclosed rather than made fully transparent.

He pointed to weakening consumer demand, including in China’s first-tier cities, where restaurants, bars and other businesses have contracted sharply. Government subsidies have tried to stimulate spending, Lo said, but have not produced lasting improvement. The collapse of the property sector, once a major driver of the economy, added to his assessment that China’s economic problems had persisted for several years.

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If domestic political parties, politicians or commentators still tell you to hurry back to invest in China and take part in the path toward the great rejuvenation, their own money will definitely not go there, and they will not buy China-related stocks.

Taiwanese companies once moved heavily into China, attracted by low-cost labor and land and the opportunity to manufacture goods for global markets. Lo said that pattern had reversed, with businesses withdrawing, returning to Taiwan or expanding elsewhere. He warned against calls for a “second westward investment” into China, saying companies should build resilience and markets independently rather than rely on incentives that Beijing could stop or cut off without warning.

Lo described the measures aimed at attracting Taiwanese businesses under China’s 15th Five-Year Plan as linked to political efforts as well as economics. He said companies that pursued short-term political benefits or participated in Beijing’s united-front work could risk losing both their reputation and their original business opportunities if they were later abandoned.

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The risk is that it can say stop and stop, or say cut off and cut off.