The Chinese Ministry of Commerce on Friday last week announced that Taiwan’s trade restrictions on Chinese goods constitute trade barriers. China had indicated in October that the deadline for its investigation into the matter would be extended to Jan. 12, the day before Taiwan’s presidential and legislative elections, but it announced the results of the probe a month early. Its motive for doing so must be to put pressure on Taiwan to influence the elections, with Democratic Progressive Party presidential candidate Vice President William Lai (賴清德) and his running mate, former representative to the US Hsiao Bi-khim (蕭美琴), maintaining a steady lead in polling.
However, several major signs suggest China’s economic intimidation would fail.
First, in the past few years, major economies have been “de-risking” the Chinese market and supply chains, and Taiwanese manufacturers have been moving out of China and redeploying production bases, overseas investments and personnel elsewhere. From January to last month, the proportion of Taiwan’s total exports to China, Hong Kong and Macau dropped to 35.4 percent — the lowest for the period in the past 21 years. From January to June, only 17.6 percent of Taiwan’s overseas investment was in China, Hong Kong and Macau — a significant fall from 44.4 percent in 2016. Furthermore, the Directorate-General of Budget, Accounting and Statistics’ latest data show an estimated 177,000 Taiwanese worked in China last year, less than half of the 400,000 who did so before the COVID-19 pandemic. Meanwhile, the number of Taiwanese going to work elsewhere has increased greatly. Notably, the number and proportion of Taiwanese going to the US have both hit new highs.
Second, accelerated global digital transformation during and after the COVID-19 pandemic, coupled with the rapid development of generative artificial intelligence, have made Taiwan’s semiconductor manufacturing and peripheral device supply chain even more crucial. The most important industry news in Taiwan this year has revolved around where Taiwan Semiconductor Manufacturing Co would build new factories, as well as progression of cooperation between major Taiwanese manufacturers and US giants such as Nvidia, AMD and Intel.
In contrast, China has seen not only a lack of business opportunities, but also a series of crises. The insolvency of several major Chinese real-estate developers, along with local governments’ debt problems, are so serious that even some of Taiwan’s traditional industries and financial institutions with strong ties to China have seen share prices stay depressed even as Taiwan’s stock market rises.
Lastly, following the government’s vigorous deployment of renewable energy over the past few years, Taiwan has slowly put its ecosystem and supply chains in place, from operation to manufacturing. Manufacturers of steel, heavy electrical equipment, cables, wind turbines, solar panels and energy storage are thriving. With the continued emergence of such local companies oriented to domestic demand, Taiwan would grow more resistant to China’s economic fluctuations. Even though the Chinese Ministry of Commerce’s announcement on Friday last week was made during trading hours on Taiwan’s stock market, the TAIEX still closed higher.
Faced with China’s unending politically motivated economic threats, the best precaution is to diversify and spread abroad while consolidating at home. Taiwan’s efforts in this direction over the past few years are bearing fruit.
Huang Wei-ping works in public service and has a master’s degree from the Fletcher School of Law and Diplomacy at Tufts University in the US.
Translated by Julian Clegg
Taiwan’s semiconductor industry gives it a strategic advantage, but that advantage would be threatened as the US seeks to end Taiwan’s monopoly in the industry and as China grows more assertive, analysts said at a security dialogue last week. While the semiconductor industry is Taiwan’s “silicon shield,” its dominance has been seen by some in the US as “a monopoly,” South Korea’s Sungkyunkwan University academic Kwon Seok-joon said at an event held by the Center for Strategic and International Studies. In addition, Taiwan lacks sufficient energy sources and is vulnerable to natural disasters and geopolitical threats from China, he said.
After reading the article by Hideki Nagayama [English version on same page] published in the Liberty Times (sister newspaper of the Taipei Times) on Wednesday, I decided to write this article in hopes of ever so slightly easing my depression. In August, I visited the National Museum of Ethnology in Osaka, Japan, to attend a seminar. While there, I had the chance to look at the museum’s collections. I felt extreme annoyance at seeing that the museum had classified Taiwanese indigenous peoples as part of China’s ethnic minorities. I kept thinking about how I could make this known, but after returning
What value does the Chinese Nationalist Party (KMT) hold in Taiwan? One might say that it is to defend — or at the very least, maintain — truly “blue” qualities. To be truly “blue” — without impurities, rejecting any “red” influence — is to uphold the ideology consistent with that on which the Republic of China (ROC) was established. The KMT would likely not object to this notion. However, if the current generation of KMT political elites do not understand what it means to be “blue” — or even light blue — their knowledge and bravery are far too lacking
Taipei’s population is estimated to drop below 2.5 million by the end of this month — the only city among the nation’s six special municipalities that has more people moving out than moving in this year. A city that is classified as a special municipality can have three deputy mayors if it has a population of more than 2.5 million people, Article 55 of the Local Government Act (地方制度法) states. To counter the capital’s shrinking population, Taipei Mayor Chiang Wan-an (蔣萬安) held a cross-departmental population policy committee meeting on Wednesday last week to discuss possible solutions. According to Taipei City Government data, Taipei’s