Singapore tech companies are leaving China

Amid mounting unification pressure from mainland China and a consolidating Chinese Communist Party rule over the country, some Taiwan companies are reportedly abandoning operations and returning home to their island nation.

Overall, the onshoring businesses are expected to bring Taiwan an estimated US$6.47 billion in new investments, according to the Taiwanese Ministry of Economic Affairs.

Chinese Politics Concern Taiwanese Businesses

A possible—yet likely implausible—explanation for Taiwanese businesses moving out of China is the ongoing US-China trade war. While it could be the outside force that set things into motion, a bigger factor behind Taiwanese businesses leaving China is the ruling Communist Party’s leadership.

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In March of last year, Chinese President Xi Jinping was effectively granted lifetime leadership of the Party.

Rumors abound among the political commentariat over the court intrigue surrounding president for life Xi Jinping; like one that his putative political rival, Jiang Zemin, runs Hong Kong from the shadows, waiting to spread his influence when the right moment comes. In a regime where information is tightly controlled, rumors that may only be fueled by half-truths or misconceptions often constitute the kind of endemic knowledge of the market that foreign businesses have to work with.

Recent Regional Conflicts Exacerbate

With the US-China trade war stepping up once more recently as the U.S. pivots to confront a nuclearizing North Korea, Taiwanese corporations will face a decision: to move their interactions more toward US-linked businesses, or to stick with China-linked businesses; even as they might maintain domestic operations in Taiwan.

Stressing the regional conflict, CNN reported Monday that China would refuse to participate in trilateral North Korea nuclear talks.

Taiwan Faces Pressure from China to Integrate

In the time since Xi Jinping’s ascendance to lifetime appointment, Party officials have stepped on the accelerator to more deeply integrate the sovereign island nation of Taiwan into the Chinese sphere of influence.

The political tensions in Taiwan have risen to such a level, with stakes seeming so high, that Foxconn founder and former Chair Terry Gou resigned late last month to run for the nation’s highest office.

With limited reliable information and a rapidly consolidating CCP in the mainland, some Taiwan businesses are seeing enough reason to return operations back home.

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