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
To The Honorable Legislative Speaker Han Kuo-yu (韓國瑜): We would like to extend our sincerest regards to you for representing Taiwan at the inauguration of US President Donald Trump on Monday. The Taiwanese-American community was delighted to see that Taiwan’s Legislative Yuan speaker not only received an invitation to attend the event, but successfully made the trip to the US. We sincerely hope that you took this rare opportunity to share Taiwan’s achievements in freedom, democracy and economic development with delegations from other countries. In recent years, Taiwan’s economic growth and world-leading technology industry have been a source of pride for Taiwanese-Americans.
Next week, the nation is to celebrate the Lunar New Year break. Unfortunately, cold winds are a-blowing, literally and figuratively. The Central Weather Administration has warned of an approaching cold air mass, while obstinate winds of chaos eddy around the Legislative Yuan. English theologian Thomas Fuller optimistically pointed out in 1650 that “it’s always darkest before the dawn.” We could paraphrase by saying the coldest days are just before the renewed hope of spring. However, one must temper any optimism about the damage being done in the legislature by the opposition Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP), under
To our readers: Due to the Lunar New Year holiday, from Sunday, Jan. 26, through Sunday, Feb. 2, the Taipei Times will have a reduced format without our regular editorials and opinion pieces. From Tuesday to Saturday the paper will not be delivered to subscribers, but will be available for purchase at convenience stores. Subscribers will receive the editions they missed once normal distribution resumes on Sunday, Feb. 2. The paper returns to its usual format on Monday, Feb. 3, when our regular editorials and opinion pieces will also be resumed.
Young Taiwanese are consuming an increasing amount of Chinese content on TikTok, causing them to have more favorable views of China, a Financial Times report cited Taiwanese social scientists and politicians as saying. Taiwanese are being exposed to disinformation of a political nature from China, even when using TikTok to view entertainment-related content, the article published on Friday last week said. Fewer young people identify as “Taiwanese” (as opposed to “Chinese”) compared with past years, it wrote, citing the results of a survey last year by the Taiwan Public Opinion Foundation. Nevertheless, the Democratic Progressive Party (DPP) would be hard-pressed
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