The China-United States Trade War has wide impact. In addition to the trade balance, dispute over intelligence property, and the advantages foreign companies’ investment in Mainland Chana, the supply chain has second thoughts on its global presence, while each country has been actively releasing various investment incentives to drive industry upgrading and economic growth. In response to the trade disputes between China and the United States, Taiwan took advantage of this opportunity to launch “Welcoming the Return of Taiwanese Investment Initiative Act,” “Three-Dimensional Development Plan for Urban Industrial Districts,” and “Statute for Industrial Innovation” to encourage Taiwanese companies to invest in and expand their production capability in Taiwan. Among them, the Welcoming the Return of Taiwanese Investment Initiative Act clearly specifies that the investment and expansion of production be related to the smart technology or functionality, while “Statute for Industrial Innovation” includes the investment tax credit for investment in 5G and smart machines in the hope for industry upgrading.
     In response to the advent of the 5G era, the Taiwanese PCB industry and related companies have invested in improvement of their manufacturing processes and production technologies. Due to the international situations, investment incentives, and the desire to gain 5G leadership, some companies in the PCB industry have obtained the qualifications for the “Welcoming the Return of Taiwanese Investment Initiative Act,” and “Three-Dimensional Development Plan for Urban Industrial Districts.” The total investment will be nearly NT$ 15 billion for high-end products and 5G leadership in Taiwan. It is reported that some companies will submit their proposals in the future.
        When comparing Taiwanese companies’ investment which aims at high-end products and 5G leadership, Chinese companies are up to speed, and have invested in and expanded their production capability since last year. They obtained abundant funds by going public and several investment proposals were submitted last year. In addition to high-end products and 5G leadership, their goal includes expansion of production capability. From the fourth quarter last year to the present, companies’ investments plan have been in progress. The Chinese stock market took a nose dive last year because of the international trade and de-leveraging policies. The economic downturn has made Chinese companies become more careful about their investment and expansion of production capability when compared to the first three quarters last year. 
         It happened that there is a similar case. Since February this year, the Ministry of Industry and Information Technology of the PRC has started to enforce the “Standard Conditions for the Printed Circuit Board Industry” and their “Interim Measures” to achieve the goal of industry upgrading through green manufacturing and product R&D as well as investment. They also specified the requirements for the production scale and manufacturing process technology. In cooperation with the Ministry of Industry and Information Technology to implement the policy “Made in China 2025” and subsidies, Chinese companies will invest in smart manufacturing and high-end processes. 
      On January 1st 2020, Chain will start enforcing the “Foreign Investment Law” which treats foreign companies, Chinese companies, and Chinese state-owned companies on the same footing. However, the Law just compiles and stipulates what has been done for years. For Taiwanese companies, Taiwan Affairs Office has clearly claimed that “Protection of Investments of Taiwan Compatriots” takes precedence over other laws and regulations, including the “Foreign Investment Law.”
       When compared to the “Foreign Investment Law,” Taiwan Affairs Office of the State Council PRC announced 31 measures in the beginning of the last year which treat Taiwanese companies and Chinese companies on the same footing. Through these measures, Taiwanese companies can participate in the “Made in China 2025” action plan and enjoy a tax preference. Qualified Taiwanese companies are subject to a Preferential Enterprise Income Tax rate of 15% and a deduction ratio for R&D expenses. But the principles of 31 measures are not included in “Protection of Investment of Taiwan Compatriots.”
      Taiwanese companies’ domestic and foreign gross output value of PCB rose from NT$ 522.2 billion in 2013 to 651.4 billion in 2018 with a growth rate of 24.7%. Because of many factors, such as the China-United States War, Chinese Standard Conditions, and investment incentives, Mainland China and Taiwan announced investment incentives. However, the migration of PCB factories depends on several factors, such as customers’ demands and the integrity of the supply chain. Therefore, in the short term, Mainland China is still the production cluster of Taiwanese companies. They have operated in Mainland China and Taiwan over years. Their R&D of high-end technologies in Taiwan allows them to maintain their world-leading competitiveness. If there were more complementary measures, more and more PCB companies would come back to Taiwan to invest.
       The Taiwan Printed Circuit Association (TPCA) pays close attention to the cross-strait investment policy issues. Since last year, we published review reports of the China-United States Trade War, held informal discussion meetings about investment incentives for the Taiwanese PCB industry, and invited experts as well as consultants to analyze and interpret China’s “Standard Conditions for the Printed Circuit Board Industry” and their “Interim Measures.” Through these review reports, informal discussion meetings, and forums, the Taiwanese PCB industry will move forward quicker and further.

PCB-Related Investment Policies in China and Taiwan