Taipei, Jan. 20 (CNA) Foreign direct investment (FDI) approved by Taiwan's government fell by more than 18 percent in 2021 from a year earlier as COVID-19 spread worldwide, according to the Investment Commission.

The country's FDI in 2021 totaled US$7.48 billion, a decline of 18.24 percent from a year earlier, while the number of approved applications from foreign investors fell 20.68 percent year-on-year to 2,711, according to the commission's data.

The FDI in Taiwan is mainly in financial services and insurance, wholesale and retail trade, real estate activities, information and communication technologies (ICT), and electronic parts and components manufacturing, according to the commission.

Among these sectors, ICT saw the largest year-on-year increase in FDI inflows at 72.08 percent, while FDI inflows to the real estate industry grew by 38.03 percent year-on-year.

The commission attributed the sharp decline in approved FDI to a continued rise in COVID-19 cases worldwide that affected foreign investors' policies towards direct investment in Taiwan.

However, Taiwan's business environment is still attractive to foreign investors, the commission said, while expressing optimism the country will lure back FDI inflows once the global COVID-19 situation improves and cross-border movement reopens.

Despite the drop in approved FDIs last year, approved investments from countries listed in Taiwan's New Southbound Policy jumped 162.32 percent from a year earlier to US$1.06 billion, with most of it coming from companies in Singapore, Thailand, and Australia, the commission said.

The New Southbound Policy aims to enhance trade and exchanges between Taiwan and 18 countries in Southeast Asia, South Asia, and Australasia in a bid to reduce Taiwan's dependence on China.

Last year, the value of investment applications from China approved by the Taiwan government totaled US$116.24 million, down 7.97 percent from a year earlier.

The decline largely reflected changes in the U.S.-China relationship and cross-Taiwan Strait situation, the volatile world economic situation, and the government's introduction of tightened regulations on Chinese investments.

Since Taiwan lifted a ban on Chinese investment in June 2009, it has approved NT$2.53 billion (US$92 million) in funds from China.

Meanwhile, the value of Taiwan's approved foreign-bound investment rose by 6.73 percent in 2021 from a year earlier to US$1.26 billion, the commission said.

Last year, the value of approved Taiwan investments in China dropped by 0.73 percent from a year earlier to US$5.86 billion, according to the commission.