Re: the Taiwan-China economic relationship... In December, 2022, the Taiwanese government reported that "Taiwan is one of the biggest investors in China. Between 1991 and the end of December 2022, approved investment in China comprised 45,195 cases totaling US$203.33 billion. In 2022, the value of cross-strait trade was US$205.11 billion.” An accompanying chart showed the enormous growth in trade over the preceding two decades.
https://www.taiwan.gov.tw/content_6.php#:~:text=Today%2C%20Taiwan%20is%20one%20of,trade%20was%20US%24205.11%20billion. A year following publication of the government statement, the cross-strait trade dropped precipitously. Some have interpreted this to mean that the China market is no longer a lure for Taiwan's capitalists. But as an article in The Diplomat published just two days ago on the current state of the China-Taiwan economic relationship states: “The root cause of Taiwan’s surprising drop in dependence on mainland China is not Taipei’s efforts, but China’s own economic woes.” I’ve linked to the article in the Asia-Pacific affairs magazine below, but to briefly summarize: 1. Taiwan has been trying to diversify its trade away from the mainland since the DPP took office in 2016, but with only "limited success". The article attributes last year’s plunge mainly to China’s post-pandemic economic slowdown resulting, among other things, from its property and stock market crash and US-led sanctions on semiconductor exports to the PRC. The effect has been “less confidence” by Taiwanese exporters and investors "in the stability and profitability of the mainland market.” 2. It has not been a one-way fight. The PRC has retaliated against Taiwan’s exports since the provocative visit of then House Speaker Nancy Pelosi to the island in 2022. The sanctions China imposed on some of Taiwan’s agricultural products were relatively minor, but “future measures...could conceivably do more damage”, the report notes, citing an admission by Taiwanese Premier Chen Chien-jen last October that "China’s market is irreplaceable.” 3. The key question is whether the present situation is conjunctural or marks a permanent shift. While the Chinese economy has slowed, "the rising trend in Taiwan’s trade reliance on the United States coincides with a period where the U.S. economy kept performing better than expectations. As a result, the U.S. market is considerably more attractive to Taiwanese businesses than the market on the other side of the strait." 4. While "Taiwan’s government but also individual businesses see the United States as a stable trade partner” it is "not the preferred one...Given the sheer size of China’s economy and the close trade relationship between Taiwan and the mainland, if China’s economy falls, Taiwan will suffer.” So it is as yet unclear whether the Taiwan-China economic relationship has been permanently broken or will of necessity recover. Full: https://thediplomat.com/2024/03/taiwans-surprising-drop-in-trade-dependence-on-mainland-china/ > > > > > > > > > > > > > > -=-=-=-=-=-=-=-=-=-=-=- Groups.io Links: You receive all messages sent to this group. View/Reply Online (#29373): https://groups.io/g/marxmail/message/29373 Mute This Topic: https://groups.io/mt/104830403/21656 -=-=- POSTING RULES & NOTES #1 YOU MUST clip all extraneous text when replying to a message. #2 This mail-list, like most, is publicly & permanently archived. #3 Subscribe and post under an alias if #2 is a concern. #4 Do not exceed five posts a day. -=-=- Group Owner: [email protected] Unsubscribe: https://groups.io/g/marxmail/leave/8674936/21656/1316126222/xyzzy [[email protected]] -=-=-=-=-=-=-=-=-=-=-=-
