ANALYSIS – In the wake of the Ukraine war and as China effectively blockades Taiwan with war drills surrounding the island, American firms, both large and small, are assessing whether to exit Taiwan or take other less drastic security precautions.
Their concern: is that any significant conflict could result in the loss or seizure of assets on the island.
This is also one of Communist China’s goals in its ongoing military intimidation campaign – to damage Taiwan’s long-term economic viability.
Politico’s China Watcher newsletter:
“It’s inherently in the interest of the PRC to maintain a high shrill tone with Taiwan to dampen the interest of companies to invest in Taiwan,” [Rupert] Hammond-Chambers [president of the Washington, D.C.-based US-Taiwan Business Council], said. “That reduces the attractiveness of Taiwan as an investment location and raises the attractiveness of China as an economic partner to offset that.”
And “the ‘Ukraine effect’ has made companies vastly more aware of and sensitive to geopolitical risk….” It noted:
The BlackRock Investment Institute earlier this month rated “U.S.-China Strategic competition,” including “military action to accelerate reunification with Taiwan” as sixth out of the world’s 10 most serious geopolitical risks. “The risk will increase as the decade wears on,” the Institute advised.
China Watcher adds:
“I have seven fortune 500 companies asking me to pre-plan and build an outline of triggers for them to start moving people, infrastructure, and assets [outside of Taiwan]. That’s real. It’s happening,” said DALE BUCKNER, chief executive officer of international security firm Global Guardian. “There are some companies that are taking this very seriously [because] they don’t want to happen what just happened in Russia where they lost billions of dollars’ worth of assets, both financial and hard, so they are already looking to disperse people and assets [to other countries.”
Meanwhile, as Politico notes, there is a gradual move away from Taiwan:
Slow motion exodus. U.S. companies in Taiwan are taking proactive measures to insulate themselves from that risk by beginning the process of relocating infrastructure — including production facilities — and personnel to safer locations in the region.
“We have manufacturers that can simply build a new manufacturing facility in South Korea or Japan or in the Philippines and some are doing that [while] some are moving those manufacturing facilities to Europe or the United States,” Buckner said. “I don’t think that you’re seeing boatloads of materials leave the island or people evacuating at scale — this will be a very drip-drip slow over time transition that won’t be noticeable unless there is some level of attack or blockade of some kind.”
So what can the U.S. government do beyond the multiple initiatives in the U.S. designed to bolster Taiwan’s military defense?
Politico notes:
“A [U.S.-Taiwan] bilateral trade agreement would smooth out some of the significant areas of economic disruption … [and provide] a framework and template for other friends and allies to do the same including the Japanese and the Aussies,” Hammond-Chambers said.
However, he adds: “The problem we’re running into here is that there’s just no appetite on the left or right for trade agreements. It’s not a Taiwan issue. It’s a trade issue.”
Let’s hope the U.S. can find ways to resolve this issue and keep Communist China from its goal of weakening Taiwan’s economy. ADN
FJB AND HIS OLD GOAT WRINKLED TACO LADY OLD MAID. FHB TOO , THE WORTHLESS CROOKED DRUG ADDICT CRACKHEAD BASTARD
New Chinese dish; “Chicken Biden with Basement Pudding.”
BIDEN IS A GARBAGE TRASH IDIOT
There is no need for any other nation to embarrass the USA. We have embarrassed ourselves. We screamed about institutional racism and sexism, and then voted in an administration that incorporates institutional racism and sexism into every cabinet pick, appointment, Executive Order and policy. We voted in an administration that panders to a small fraction of the population that is delusional, and to those that encourage and defend their mental illness, insisting that the govt force the population to patronize their delusions, even to the detriment of our military and compromise of our national defense. It is insanity that all is compromised in order to humor a fraction of spoiled mentally disturbed deviants of society in order to normalize abnormal behavior. Simply accepting abnormal behavior while recognizing that it IS abnormal behavior, is not enough, and absolutely not the same as govt creating and enforcing policy and law that forces an entire population to involuntarily and publicly recognize the abnormal as normal, defying reality. It is an attempt to control individual and even majority thought and speech in spite of reality. It is a totalitarian act by an administration of what is suppose to be a Constitutionally protected Republic of the people. We brought this embarrassment and madness upon ourselves; no other nation was needed to accomplish what is already done; complete and total embarrassment. “Tolerance will reach such a level that intelligent people will be banned from thinking, so as not to offend the imbeciles”-Dostoevsky
We should allow ZERO business with China
No, the question is whether #FJB will humiliate us? I fear the answer is in the affirmative.
New Chinese dish; “Chicken Biden with Democrat Nuts and Delaware Basement Pudding.”
Of course the PRC are going to continue the “muscle flexing” intimidation tactics & maybe escalate threats to be more frightening. AND as long as we have the same admin in our WH, & other unstable world locations, PRC’s challenges will continue. For firms doing business in Taiwan, their decisions are not easy. It seems a matter of how much& how real their risks.