Taiwan is still the fifth largest net creditor – Taipei Times

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The restructuring of global supply chains led many Taiwanese companies to send more of their funds overseas last year, the central bank said.

Taiwan remained the fifth largest net creditor last year as its net international investment position (NIIP) hit another new high, the central bank said on Friday.

Taiwan’s external financial assets reached $2.91 trillion at the end of last year, up $247.04 billion or 9.3 percent from a year earlier, while the country’s external financial liabilities reached $1.17 trillion, $183.12 billion or 18.5 percent more than a year ago, data compiled by the central bank showed.

The gap between Taiwan’s external financial assets and liabilities hit a new high of $1.74 trillion, up $63.92 billion or 3.8 percent from a year earlier, positioning the country as the world’s fifth-largest net creditor , the data showed.

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NIIP is the difference between a country’s external financial assets and its external financial liabilities, the central bank said.

Japan took the top spot as a net creditor with an NIIP of about US$3.44 trillion last year, followed by Germany ($3.20 trillion), China ($2.19 trillion) and Hong Kong ($1.78 trillion), the central bank said.

The rise in Taiwan’s external financial assets last year came in part from a boom in global stock markets, which significantly increased the value of foreign stocks held by investors in Taiwan, he said.

Stock markets around the world rose about 17 percent last year, helping Taiwan’s portfolio investment rise 14.1 percent from a year earlier to $1.39 trillion, he said.

The country’s cumulative investment also hit a new high of $500.14 billion last year, up 10.9 percent from a year earlier, as the restructuring of global supply chains led many Taiwanese companies to send more of their funds abroad. the state, he said.

The central bank was referring to companies such as contract chip maker Taiwan Semiconductor Manufacturing Co (台積電), which has poured funds into the US, Japan and Germany to build advanced wafer fabs to diversify its manufacturing bases.

Taiwan has long maintained a surplus on its current account, which mainly measures a country’s exports and imports of goods and services.

Other major creditors, Japan, Germany and China, have also traditionally been net exporters, although Japan has run trade deficits in recent years.

At the end of last year, Taiwan’s current account stood at $105.33 billion, up from $100.93 billion at the end of 2022, central bank data showed.

External financial liabilities were boosted by cumulative foreign direct investment in Taiwan, which reached a new high of $136.6 billion last year, up 9.8 percent from a year earlier.

In addition, total portfolio investment in Taiwan by foreign investors rose 33.5 percent from a year earlier to $710.9 billion, the central bank said.

The higher portfolio numbers reflected, in part, the 26.8 percent rise in TAIEX last year, he said.