In the short, medium and long term, Taiwanese businesses operating in China are likely to face three major problems.
The first problem is the normalization of electricity rationing.
Australia is the largest exporter of coal to China. In 2018, China imported more than 80 million tonnes of coal from Australia, or more than 20 percent of total coal imports that year.
However, following a steep deterioration in relations between the two countries, Beijing in December last year announced a ban on the importation of Australian coal.
The sudden trade embargo resulted in a shortfall of 80 million tonnes, and coal suppliers in other countries were unable to fill the gap on such short notice.
Moreover, Australian coal is of a particularly high quality. Its energy generation efficiency is 1.5 times higher than coal from China or other countries.
Not long after the imposition of the embargo, local governments across China, including in the provinces of Zhejiang and Hunan, introduced electricity restrictions, and Beijing last month issued new guidelines to control energy consumption and intensity, known as “dual control.”
To date, the policy has resulted in the closure of at least 50 power stations. How long can the electricity rationing continue? There are no quick and easy solutions available to Beijing.
As a result, Taiwanese businesses operating in China will in the foreseeable future likely experience frequent power outages and must prepare for them to increase in duration.
The second problem is the normalization of conflict.
The ascent to power of Chinese President Xi Jinping (習近平) has brought about root-and-branch change to the global order. This has increased the likelihood of conflict at a scale, quantity, direction and depth rarely seen in the past few decades.
The US-China trade war cannot be resolved anytime soon, and contradictions between China and other countries could also become more severe.
The Taiwan-China relationship will continue to fluctuate, and it would be nothing short of a miracle if a further deterioration in the relationship is averted. As Xi continues to solidify his position, factional infighting within the Chinese Communist Party (CCP) is likely to increase. Taiwanese businesses operating in China might therefore come under significantly increased pressure from local governments, including with regard to taxation, environmental regulations and labor disputes.
Finally, there is the normalization of hostage taking. It goes without saying that Taiwanese business, and people living and working in China, have become potential targets of hostage diplomacy. Their lives can be terminated and their personal assets can be confiscated at the whim of the CCP.
To understand the severity of the threat to Taiwanese in China, one only needs to observe the case of two Canadians, former diplomat Michael Kovrig and businessman Michael Spavor, who were imprisoned by Beijing in December 2018. This was in retaliation for the arrest of Huawei Technologies Co chief financial officer Meng Wanzhou (孟晚舟) by Canadian authorities.
Nobody knows how many innocent Taiwanese are languishing within China’s “black prison” system.
Additionally, Taiwanese with business interests in China, including artists, often must declare their political affiliation and constantly respond to Chinese policies, such as Xi’s “common prosperity” drive.
Some Taiwanese companies believe that because they are not listed companies or that they do not operate on the scale of mega-corporations, such as Hon Hai Precision Industry Co — better known as Foxconn outside of China and Taiwan — or Want Want China Holdings, they do not have to worry about the charity required by that policy.
This line of thought might make sense in respect of corporate responsibility in Taiwan, but it does not pass muster in Xi’s China.
Moreover, China’s Taiwan Affairs Office has publicly stated that China welcomes “Taiwanese companies investing in [China’s] charitable and public welfare foundations.” The subtext of this statement should be obvious.
Finally, if Taiwanese businesses operating in China believe that the CCP would not know how much money they have made, then they are naive in the extreme. A simple investigation by the authorities is all that it would take.
The situation in China is becoming more severe by the day.
In the words of Confucius: “Do not enter dangerous lands or put down your roots in unstable regimes.”
Taiwanese businesses of any size should stop procrastinating: It is time to get out of China while they still can.
Liu Ming-te holds a doctorate in political science from the Free University of Berlin.
Translated by Edward Jones
The Chinese Communist Party (CCP) challenges and ignores the international rules-based order by violating Taiwanese airspace using a high-flying drone: This incident is a multi-layered challenge, including a lawfare challenge against the First Island Chain, the US, and the world. The People’s Liberation Army (PLA) defines lawfare as “controlling the enemy through the law or using the law to constrain the enemy.” Chen Yu-cheng (陳育正), an associate professor at the Graduate Institute of China Military Affairs Studies, at Taiwan’s Fu Hsing Kang College (National Defense University), argues the PLA uses lawfare to create a precedent and a new de facto legal
Chile has elected a new government that has the opportunity to take a fresh look at some key aspects of foreign economic policy, mainly a greater focus on Asia, including Taiwan. Still, in the great scheme of things, Chile is a small nation in Latin America, compared with giants such as Brazil and Mexico, or other major markets such as Colombia and Argentina. So why should Taiwan pay much attention to the new administration? Because the victory of Chilean president-elect Jose Antonio Kast, a right-of-center politician, can be seen as confirming that the continent is undergoing one of its periodic political shifts,
On Sunday, elite free solo climber Alex Honnold — famous worldwide for scaling sheer rock faces without ropes — climbed Taipei 101, once the world’s tallest building and still the most recognizable symbol of Taiwan’s modern identity. Widespread media coverage not only promoted Taiwan, but also saw the Republic of China (ROC) flag fluttering beside the building, breaking through China’s political constraints on Taiwan. That visual impact did not happen by accident. Credit belongs to Taipei 101 chairwoman Janet Chia (賈永婕), who reportedly took the extra step of replacing surrounding flags with the ROC flag ahead of the climb. Just
Taiwan’s long-term care system has fallen into a structural paradox. Staffing shortages have led to a situation in which almost 20 percent of the about 110,000 beds in the care system are vacant, but new patient admissions remain closed. Although the government’s “Long-term Care 3.0” program has increased subsidies and sought to integrate medical and elderly care systems, strict staff-to-patient ratios, a narrow labor pipeline and rising inflation-driven costs have left many small to medium-sized care centers struggling. With nearly 20,000 beds forced to remain empty as a consequence, the issue is not isolated management failures, but a far more
RSS