Taiwan brings home Chinese factories, which may benefit China in the long run

Christian Patterson
2019-12-02
Underground Mall

The relationship between Taiwan and China is complicated, and I want to continue writing about it, to try to make sense of it myself.

Bloomberg reported that Taiwan is benefiting from the US trade war against China. In this post, I’ll go over what the situation actually is. Then, I’ll talk about the impact it has on Taiwan-China relations, which in the long run seem to help Capitalist China.

Bloomberg writes:

“Taiwan’s push for its companies to invest in advanced manufacturing at home after decades of focusing on China is helping off-set the effects of Beijing’s trade war with the U.S., the government said.

“Taiwanese companies have pledged to invest almost NT$1.2 trillion ($39 billion) at home since the government initiated a program at the beginning of the year to attract investment from local companies with facilities in China.”

The article doesn’t mention which companies except for Foxconn.

They continue:

“The plan to lure local companies to invest back home is one of two competing economic visions for Taiwan as voters weigh their choices ahead of the Jan. 11 presidential election. While incumbent President Tsai Ing-wen is pinning Taiwan’s economic future on developing industries such as advanced manufacturing, clean energy and defense domestically, her opponent, Han Kuo-yu of the opposition Kuomintang, advocates further removing barriers to doing business with China.”

This shows an interesting divide in Taiwanese politics. The nominal left-wing is pro-US, South Korea, Japan, etc. The right-wing is pro-China.

The right-wing of Taiwan is pro-China, because they see themselves as ethnically China, and they someday want a united, Capitalist China. The left-wing of Taiwan seems themselves as culturally Taiwanese, which for them has more in common with Japan and South Korea, see they don’t want a united China.

This is presented by some as a good thing for the US, because it seems to show the US squeezing business out of China, and into national markets that are more easily controllable than China.

However, Taiwan is more knotted up in Chinese capitalist interests than other countries, and they won’t be unknotted easily.

By that I mean, as long as China is constantly pushing towards a united China, and half of Taiwan has similar interests, then those interests will always find a way to overlap.

Bloomberg also writes:

“Taiwanese companies have moved facilities producing high-end networking gear, laptops, servers and bicycles back to Taiwan this year, while manufacturing of lower-margin products has gone to Southeast Asia, Kung said. The minister identified smart manufacturing and connected devices as new areas Taiwanese companies could compete in.”

In other words, shifting some manufacturing jobs to Taiwan isn’t an isolationist act – it’s temporary management of a multi-national economic project. They aren’t consolidating business into Taiwan, they’re also spreading into Southeast Asia. And as soon as its politically viable to work in China again, they will.

The US has to “protect” Taiwan, and Hong Kong, but the reason there’s so much anxiety in the West about them shows that China’s gravity is too strong to overcome. Any type of internal economic growth of Taiwan can be utilized by China. And the fact that Taiwanese companies are more integrated into SE Asia doesn’t change that, because China itself is even more integrated in SE Asia.

It simply seems like the measures to counter Chinese growth, and its oncoming role as a global superpower, are futile. China has too much momentum.

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