Taiwanese democracy needs more investment, not less

Taiwan is losing geopolitical support – that much is obvious. Beijing is peeling away its remaining diplomatic allies while Donald Trump’s remarks about Nato are spooking every friendly capital in Asia. The US Senate has just approved a foreign aid package which includes provision for Taiwan, but the bill will struggle to pass the Republican-controlled lower house. Less widely reported is the fact that the money’s running away too. Foreign direct investment in Taiwan fell 15 per cent, year-on-year, in 2023. The total amount US investors hold in Taiwan contracted by 40 per cent between 2018 and 2022, and there’s not much sign of that outflow reversing with the election last month of another fiercely pro-democracy president in Lai Ching-te. Warren Buffett admires Taiwan Semiconductor, the world’s biggest contract manufacturer for chips, but has sold nearly all of his holding because, as he put it: “I don’t like its location”.