Taiwan could benefit from the reorganization of global supply chains due to its democratic government, Taiwan Academy of Banking and Finance president Su Jain-rong (蘇建榮) said.
Wu made the remarks in an interview with the Chinese-
language Liberty Times (the sister paper of the Taipei Times) that was posted online yesterday.
Photo: Chen Yu-jui, Taipei Times
Citing Academia Sinica member Cyrus Chu’s (朱敬一) book Ultimate Economic Conflict between China and Democratic Countries: An Institutional Analysis (價值戰爭：極權中國與民主陣營的終極經濟衝突), Su said that the global supply chain is, by and large, being restructured along the lines of the democratic and autocratic camps.
Following the US-China trade war and COVID-19 pandemic, many companies have pulled out of China and relocated supply chains to other countries, he said.
The restructuring effort, headed by the US, does not imply desinicization, he said, adding that it aims to promote “ally-shoring,” the relocation of manufacturing plants from China to other countries — mainly democratic and free ones.
Su cited the US-Taiwan Initiative on 21st Century Trade bill signed by US President Joe Biden in August last year as an example of “ally-shoring,” saying that Taiwanese businesses sending products to the US, of which manufacturing plants were previously based in China, have relocated these plants to Mexico under the restructured supply chain.
Taiwan’s small and medium-sized enterprises (SMEs) provide greater vitality and flexibility in investing compared with larger corporations, he said, adding that these SMEs could play an essential role in the global supply chain.
Countries in the Americas and Europe had hoped that China would begin to dial back authoritarian rule after an improvement of its economy following its inclusion in the WTO in 2001, but Beijing ended up “stealing” democratic countries of their intellectual properties and other technologies after becoming an economic powerhouse, Su said.
With Chinese President Xi Jinping (習近平) adopting a heavy-handed political approach, foreign companies are hesitant to continue investing in China, resulting in a shrinking production sector, reduced jobs and lower consumption, Su said.
China’s public and private-sector debt has reached 200 percent of its GDP over the past few years.
Local government debt is primarily due to real-estate bubbles and the inability to repay its debts has affected China’s overall financial system, Su said.
The People’s Bank of China is making a large amount of funds available in hopes that financial institutions would have sufficient capital on hand and avoid potential financial storms, he said.
Information opacity in China is another concern, as the nation’s issues could be severe and catch its neighbors off guard, he added.
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