Foreign Direct Investment (FDI) Management and Economic Crisis in Asia: Taiwan's Changing Strategy

Taiwan is the world's seventh largest outbound investor, and the only large foreign investor without diplomatic ties to protect its economic interests. Taiwan's FDI developed noticeably in the late 1980s, both to defend and expand markets abroad. From an initial focus on US investments, Taiwan's FDI has grown most in East and Southeast Asia. The rapid flow of FDI to China in the 1990s, without any warming of political ties, caused Taiwan's government to attempt to curb its growth and redirect it to Southeast Asia -without much success. Taiwan's FDI strategy was an important factor in enabling it to weather the Asian economic crisis.