The government should take precautions to prevent a financial blockade by international banks and ensure that it has enough capital to purchase wartime necessities, the results of a tabletop exercise released yesterday showed.
The tabletop exercise examined the possibility of international banks facing “external pressure” to impose a “financial blockade” on Taiwan during wartime.
It was held last month by the Asia-Pacific Policy Research Association, Taiwan Center for Security Studies Association and other organizations.
Photo: Lo Pei-de, Taipei Times
Such a blockade could result in Taiwan’s foreign-exchange reserves being transferred out of those banks’ accounts, the report said.
To prevent this from happening, Taiwan could enter into agreements with countries that support it to establish mechanisms for drawing on its foreign reserves and ensure it could purchase wartime necessities, it said.
The government should also borrow from international capital markets during peacetime, and if the borrowing limit is reached, state-run banks and enterprises, and local governments should be allowed, under strict supervision, to issue national debt to qualified foreign international investors, the report said.
The central bank could also consult with the Financial Supervisory Commission to simulate scenarios on controlling Taiwan’s foreign-exchange reserves and stock exchange, as well as when to implement significant interest rate hikes, it said, adding that the results of such simulations should be presented to the president and the premier as a reference for policymaking.
Taiwan could make an arrangement with the Federal Reserve and the Bank of Japan to use foreign capital reserves during wartime, Chinese Culture University Institute of National Development and Mainland China adjunct professor Chen Chung-hsing (陳松興) said at a news conference yesterday on the report’s findings.
Such arrangements would not be free, so Taiwan might have to use some of its overseas assets as collateral, Chen said.
With this type of mechanism in place, Taiwan’s central bank would be able to reassure the public that it would have sufficient access to its foreign-exchange reserves during a crisis, he added.
The tabletop exercise places a special emphasis on crisis prevention over crisis management, and risk management over damage control, said Chinese Nationalist Party (KMT) Legislator Chen Yeong-kang (陳永康), a retired Navy admiral who organized the exercise.
The holistic exercise covers various fields, from financial to energy security and the continued functioning of industries during war, thereby helping the country develop resilience, the lawmaker said.
‘DENIAL DEFENSE’: The US would increase its military presence with uncrewed ships, and submarines, while boosting defense in the Indo-Pacific, a Pete Hegseth memo said The US is reorienting its military strategy to focus primarily on deterring a potential Chinese invasion of Taiwan, a memo signed by US Secretary of Defense Pete Hegseth showed. The memo also called on Taiwan to increase its defense spending. The document, known as the “Interim National Defense Strategic Guidance,” was distributed this month and detailed the national defense plans of US President Donald Trump’s administration, an article in the Washington Post said on Saturday. It outlines how the US can prepare for a potential war with China and defend itself from threats in the “near abroad,” including Greenland and the Panama
The Chinese Nationalist Party (KMT) is maintaining close ties with Beijing, the Democratic Progressive Party (DPP) said yesterday, hours after a new round of Chinese military drills in the Taiwan Strait began. Political parties in a democracy have a responsibility to be loyal to the nation and defend its sovereignty, DPP spokesman Justin Wu (吳崢) told a news conference in Taipei. His comments came hours after Beijing announced via Chinese state media that the Chinese People’s Liberation Army’s Eastern Theater Command was holding large-scale drills simulating a multi-pronged attack on Taiwan. Contrary to the KMT’s claims that it is staunchly anti-communist, KMT Deputy
RESPONSE: The government would investigate incidents of Taiwanese entertainers in China promoting CCP propaganda online in contravention of the law, the source said Taiwanese entertainers living in China who are found to have contravened cross-strait regulations or collaborated with the Chinese Communist Party (CCP) could be subject to fines, a source said on Sunday. Several Taiwanese entertainers have posted on the social media platform Sina Weibo saying that Taiwan “must be returned” to China, and sharing news articles from Chinese state media. In response, the Mainland Affairs Council (MAC) has asked the Ministry of Culture to investigate whether the entertainers had contravened any laws, and asked for them to be questioned upon their return to Taiwan, an official familiar with the matter said. To curb repeated
Myanmar has turned down an offer of assistance from Taiwanese search-and-rescue teams after a magnitude 7.7 earthquake struck the nation on Friday last week, saying other international aid is sufficient, the National Fire Agency said yesterday. More than 1,700 have been killed and 3,400 injured in the quake that struck near the central Myanmar city of Mandalay early on Friday afternoon, followed minutes later by a magnitude 6.7 aftershock. Worldwide, 13 international search-and-rescue teams have been deployed, with another 13 teams mobilizing, the agency said. Taiwan’s search-and-rescue teams were on standby, but have since been told to stand down, as