Foreign Bonds Face Tough Reception in Taiwan
Taiwan has long been a welcoming destination for foreign bonds, but that may be changing. The island nation is now facing a tough reception from investors, as the government takes steps to limit the amount of foreign debt it can issue.
Taiwan’s Growing Debt
Taiwan’s debt has been growing steadily in recent years, and the government has been looking for ways to reduce it. In 2020, the government announced plans to limit the amount of foreign debt it can issue to 10 percent of its total debt. This was a significant change from the previous policy, which allowed up to 20 percent of the total debt to be issued in foreign bonds.
Foreign Bond Reception
The new policy has had a significant impact on the reception of foreign bonds in Taiwan. Investors have become more cautious about investing in foreign bonds, as they are uncertain about the government’s commitment to the new policy. This has led to a decrease in the amount of foreign bonds being issued in Taiwan.
Government Response
The government has responded to the decrease in foreign bond issuance by introducing a number of measures to encourage foreign investors. These include tax incentives for foreign investors, as well as a relaxation of restrictions on foreign ownership of local companies. The government has also taken steps to make it easier for foreign investors to access the local bond market.
Impact on Local Bond Market
The decrease in foreign bond issuance has had a significant impact on the local bond market. The market has become more volatile, as investors are uncertain about the government’s commitment to the new policy. This has led to a decrease in the amount of foreign bonds being issued in Taiwan.
Impact on Foreign Investors
The decrease in foreign bond issuance has also had an impact on foreign investors. Many foreign investors have become more cautious about investing in Taiwan, as they are uncertain about the government’s commitment to the new policy. This has led to a decrease in the amount of foreign investment in Taiwan.
Outlook for Foreign Bonds
The outlook for foreign bonds in Taiwan is uncertain. The government has taken steps to encourage foreign investment, but it remains to be seen whether these measures will be enough to attract foreign investors. In the meantime, investors will continue to be cautious about investing in foreign bonds in Taiwan.