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China may not impose a war on Taiwan, but Taiwan has already started a trade war with China

Vikrant Thardak by Vikrant Thardak
December 1, 2021
in Indo-Pacific
China may not impose a war on Taiwan, but Taiwan has already started a trade war with China
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China has come up with tough choices for the Taiwanese conglomerates operating on the mainland – debilitate ties with Taiwan’s President Tsai Ing-wen or lose the vast Chinese markets.

The Chinese authorities recently imposed hefty penalties and taxes, totalling $74.1 million, on Far Eastern Group’s subsidiaries operating in China. Chinese officials said the company was violating protection protocols at factories.

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China punishes pro-Taiwan companies in China:

However, Taiwan Affairs Office spokesperson Zhu Fenglian couldn’t betray his emotions while loathing the deep-pocketed company for supporting Tsai Ing-wen’s Democratic Progressive Party (DPP) in the 2020 presidential elections.

Also read: The final results of Australia Vs China Trade war is here. Australia wins handsomely

“No one or any company is allowed to provide financial aid for ‘Taiwan independence’ secessionists while making money on the mainland,” Zhu yapped during a news conference last week.

“China would not tolerate a company that played nice with both the Chinese government and Taiwan’s DPP government in an attempt to run business smoothly on both sides of the strait,” an insider in Taiwan’s business community was quoted as saying by Nikkei Asia.

China weaponizes economic might against Taiwan:

Pro-democracy businesses of Taiwan operating on mainland China may soon find it perilous to carry out business activities without inviting the wrath of the Chinese Communist Party (CCP). Either these companies will have to wind up their business operations in China or they must give up their support to the Tsai administration.

Again, China is weaponizing its economic might to downsize the independence seekers or what China loves to call the “secessionist forces” of Taiwan. By lavishing easy loans and hefty financial aids to tiny nations across the Pacific and Africa, China made one nation after another sever ties with Taiwan and switch to the People’s Republic of China.

China fast losing its only leverage:

But mired in economic disaster and energy crisis, China is fast losing this convenient leverage against Taiwan. Companies are anyway flying the coop from China, investors are flocking to greener pastures in southeast Asia and India, and the Chinese economy is fast moving towards stagflation.

Also read: With South Korea on its side, Russia is turning China’s trade war over its head. Australia style

On the contrary, Taiwan is witnessing more and more democratic countries throwing their weight behind the Tsai administration to deter China’s invasion attempts. For instance, India in 2018 had signed a bilateral investment agreement to promote investment flows and economic ties between the two nations.

Similarly, last month, reports emerged that Taiwan Semiconductor Manufacturing Company (TSMC), one of the world’s largest chipmakers, had announced plans to build a new plant in Japan. This will help revive Japan’s declining chipmaking sector and bolster its economic security.

Why China’s trade war against Taiwan could backfire?

Taiwan’s integration with the world’s top democratic economies is a big setback to China, and that may very well render China’s trade war against Taiwan utterly suicidal in long run.

Consider this – when China banned pineapple import from Taiwan earlier this year, people across southeast Asia, particularly from Japan, sprung into action and started revenge-buying “freedom pineapples” of Taiwan. So, the move backfired tremendously.

Similarly, China’s move to intimidate pro-DPP businesses may also end in tatters. It may cost them already-battered markets in China, but it will very well help them set footholds in the new markets across democratic nations of the region.

Taiwan- The next Australia?

Australia-China trade war is yet another great example of how China-imposed economic tussles go up in smoke without causing even minuscule uneasiness in the targeted nations. Also, China has been an export-based economy, and trade wars generally were fiendish for export-based economies.

So, Taiwan is well poised to go Australia-way in warding off the trade war menace being imposed by Beijing. It could open windows of enormous opportunities for Taiwanese companies to shift their business out of China, and grow bolder against Chinese hegemony. Eventually, China’s trade war against Taiwan could end up fuelling anti-China sentiments in Taiwan.

Tags: CCPChinaChina-Taiwan trade warChinese communist partyTaiwanTsai Ing-wenXi Jinping
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Vikrant Thardak

Vikrant Thardak

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