Taiwan's outbound FDI flows are lumpy, and these days, heavily influenced by TSMC's investment decisions. But there is also an underlying trend which is nonetheless clear and important: a shift away from investing in China.
Headline GDP contracted in the first release of Q3 data, but while not strong, the details were somewhat better. Investment was pulled down by a regulatory shift that affected housing, but non-residential capex rose. Inventories dropped.
The driving role of services activity is even clearer in Japan's output data: today's tertiary sector activity data for September continued to trend up. That is consistent with all the sentiment surveys, which show non-manufacturing stronger than manufacturing.
