It is “still too soon to tell” whether power shortages in China would lead to a wave of reshoring by Taiwanese manufacturers, Minister of Economic Affairs Wang Mei-hua (王美花) said yesterday.
Wang’s remarks came in response to Democratic Progressive Party (DPP) Legislator Cheng Yun-peng (鄭運鵬), who during a meeting of the legislature’s Economics Committee inquired whether any Taiwanese firms have yet made the announcement to “come home” amid power rationing in China.
“All this just happened and manufacturers are dealing with it by switching production to existing manufacturing facilities outside of China,” Wang said. “However, most firms have a wait-and-see attitude toward long-term investment decisions.”
Photo: George Tsorng, Taipei Times
Taiwanese manufacturers that have retained domestic production facilities are better able to weather the unexpected shortages, while firms that exclusively produce in China would inevitably be affected, she said.
“It is inevitable that firms that only manufacture in China will take longer to deliver their orders, leading ultimately to lower volumes,” she added.
DPP Legislator Chiu Yi-ying (邱議瑩) asked whether Taiwan has enough electricity generation capacity to supply industrial users, especially if more manufacturers return.
Wang said that Taiwan has mainly secured its energy needs through long-term contracts and is therefore less exposed to an ongoing global energy crunch.
About 70 percent of Taiwan’s liquefied natural gas and 75 percent of its coal come from long-term supply agreements, she said.
“We are prepared,” Wang said, adding that Taiwan has a 30-day supply of coal, as opposed to about 10 days in India or China.
Separately, Minister Without Portfolio John Deng (鄧振中) said that Taiwan’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been “well-received” by Japan, Canada, New Zealand and Australia.
“You can describe the responses to Taiwan’s application as encouraging,” Deng told political commentator Frances Huang (黃光芹) in an interview.
After China’s surprise bid to join the regional trade pact on Sept. 16, Taiwan swiftly followed suit and sent its membership application a week later, worried that China’s membership might derail its long-planned attempt to join the bloc.
“A lot of countries were taken by surprise by China’s bid,” Deng said. “As long as more than half of China’s GDP is generated by state-owned enterprises, it will be hard for the country to meet the CPTPP’s tough requirements.”
Describing China’s bid as a “sneak attack,” Deng said that Taiwan, which “pre-paved” its bid, is more “welcomed internationally.”
“No one is throwing cold water on our bid,” he said, describing Taiwan’s chances as “good.”
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