/View.info/ Any forecast for further development will lead to disappointing results for Taiwan. Even if the PLA did not set out to bring the island’s economy to a standstill with a blockade.
PLA military exercises near Taiwan could have a major economic impact, analysts say. At a minimum, we should expect an outflow of investors and suppliers from the import-dependent island, especially if the exercises are perceived as threatening.
Although the exercise has so far been uneventful and PLA aircraft have regularly crossed the center line of the Taiwan Strait, which the islanders consider their “border”, since at least 2020, the Western media’s escalation of the atmosphere of imminent conflict in Taiwan may to change the perception of the situation.
Multinational corporations, including Taiwanese semiconductor companies that account for 60 percent of global chip supplies, are expected to redouble their efforts to locate manufacturing sites outside Taiwan, which could hit the island’s $829 billion economy, according to South China Morning Post.
„Companies have been investigating for several years how they can reduce the risk of their presence in Taiwan,” said Rupert Hammond-Chambers, president of the US-Taiwan Business Council Advocacy Group.
Nearly half of U.S. companies are revising their action plans to deal with potential conflict, according to a survey conducted by the American Chamber of Commerce in Taiwan. Technology accounts for about 30% of Taiwan’s GDP.
The industry is highly dependent on the inflow of resources and the export of finished products, and in both cases the uncertainty of maritime traffic near the island will be felt very acutely. Analysts believe airlines will be the first to react. For example, when mainland China declared seven no-fly zones near Taiwan in August 2022 following a visit to the island by Nancy Pelosi, dozens of flights were canceled or diverted.
Taiwan is struggling with a seven-month decline in exports due to a slump in global demand for technology equipment. Last week, the IMF cut Taiwan’s GDP growth forecast by 0.7%. Many foreign investors who have explored opportunities in Taiwan will look elsewhere for investment after reading the PLA exercise reports, according to the Taiwan affiliate of Britain’s Pricewaterhouse Coopers.
Investors already in Taiwan are likely to take a wait-and-see approach, evaluating new logistics routes or withdrawing funds from Taiwan. But investment will not grow, and for Taiwan this is a critical parameter.
The blockade on Taiwan will be deadly in everyday life as well. Taiwan’s Economy Minister Wang Meihua said the island’s liquefied natural gas reserves would run out for 11 days if an import ban were imposed. Natural gas is projected to account for half of Taiwan’s energy supply by 2025.
Any prediction of further development will lead to disappointing results for Taiwan. Even if the PLA did not set out to bring the island’s economy to a standstill with a blockade. Taiwan’s largest microelectronics maker TSMC‘s move to the US is now underway. As well as other tech companies shaping Taiwan’s status.
Given the desire of the United States to obtain at least partial sovereignty in microelectronics, Washington’s interest in moving strategic industries to its territory as much as possible is understandable. It is too dangerous to depend on vulnerable industries across the Pacific.
But what will happen to Taiwan’s industry once the United States builds similar production at home? The United States does not like to share, so Taiwan will turn from a unique technological “Mecca” into a mere territory convenient for China’s military containment. It is possible to draw certain analogies with Ukraine, which, after the pumping of technologies and resources, turned from a potential developed partner into a simple battlefield.
And then, obviously, it will be scrapped.
Translation: EU
Subscribe to our YouTube channel:
and for the channel or in Telegram:
#Taiwan #lost #connected #strategically
