As China's "One Belt, One Road" strategy and its Asian Infrastructure Investment Bank initiative gather steam, Taiwanese companies are likely to benefit from the immense surge in construction projects anticipated throughout Asia, according to Taiwan-based institutional investors.
The Asia Development Bank has estimated that annual demand for capital to fund basic infrastructure investment among governments in Asia will reach US$730 billion by 2020.
China International Capital Corp., the largest investment banking and research firm in China, said it anticipates that Beijing will pour more than US$1.65 trillion into its "one belt, one road" strategy over the next decade, much of which will flow to neighboring nations in Asia.
Meanwhile, the prospects of Taiwanese companies such as Asia Vital Components Co., and Power Mate Technology Co. have risen in the eyes of investors as they are deemed to be companies well-positioned to reap rewards as the Beijing-led initiatives take shape.
Taiwan's Asia Vital Components Co., a thermal solution provider in 2011 acquired a 45 percent stake in a subsidiary company formed with China's China South Locomotive & Rolling Stock Corp. Local institutional investors are expecting the company to benefit from expected growth in demand for high-margin railway heat dissipation and electrical products including power resisters, water-cooled transformers and rackable connectors.
Power Mate Technology Co., a power supply company, secured a role in China's railroad equipment supply chain in 2010 after its electronic equipment products received EN 50155 standard certification for railway applications. Since its founding, Power Mate's products have been used in a number of demanding industrial applications including medical, weaponry, solar power and automobiles. The company is an original design manufacturer, and markets products under the brand name P-Duke.
Chia-yi Lin (franceslin@taitra.org.tw)
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