In the economic globalization and the trend of regional economic integration, the cross-border trade and investment barriers reduce substantially. The international trade and the rapid growth of foreign investment promote the globalization of production and markets; also, global markets become even more intense competition. In order to reduce cross-border trade barriers and increase competitive advantage, a global investment pattern has been implemented by TEs which become a new trend. In recent years, there are economic integrations actively in East Asia. ASEAN plus one (China) attracted the greatest attention. Taiwan''s economy is export-oriented, and the relationship with China has always been extremely close. Southeast Asia is the main area where TEs invest in overseas before China reforms and opens up.
Facing China''s foreign policy changes, the East Asian regional economic integration, and the global economic downturn caused investment environment change, the study focus on Taiwan manufacture industry which is the mainly industry invest overseas. The first purpose of this study is to understand the external business direct investment location choice factors. Second, this study analyzes the location advantages between China and six ASEAN countries. Third, this study explore whether TEs make full use of economic and trade agreements among countries, in order to finds out TEs effective division of labor and layout to maintain their competitive advantage between China and the six ASEAN countries. The main conclusions of this study are as follows:
1.Taiwanese investing in China and ASEAN countries concerned the cost of production first, including low-cost labor and land; in recent years, they consider the potential development of the local market along with the cost of production.
2.Singapore is the most sophisticated business environment and infrastructure as well as the lowest tax burdens currently. China has huge market size, and Vietnam has cheapest labor costs that can compete with the China. China and six ASEAN countries have been promote industrial upgrading, especially technical and capital-intensive industries. Incentive polices include tax relief for investment in concessions. Vietnam is the only one encouraging labor-intensive industries there.
3.The investment abroad of TEs had shifted from small and medium-sized labor-intensive to large capital-intensive and technology-intensive industries. The mainly investment area from the region of the Pearl River Delta in China moves to the Yangtze River Delta, where has a good infrastructure, transport network, and abundant skilled manpower. Due to the economic policies changed in China, some TEs would move to the western part of China to develop domestic market. While the industries who’s products mainly for export, they have concerned to move to other countries for manufacturing now. Vietnam is one that has attracted TEs due to its low operating costs comparing with other five ASEAN countries.