Editorial: The Economy of the World and Taiwan under Biden | Apple Daily Taiwan
Now that Biden has been determined the President-elect of the U.S., many believe that the confrontation between the U.S. and China will continue but also be eased in the future. Apart from confrontations over national security, military, and geopolitics in the South China Sea, the most important U.S. suppression of China under Trump was the economic one. The Trump administration took radical measures such as increasing tariffs on China substantially, cutting off the supply chain of China’s technology industry, withdrawing investments from China, and restricting financing for Chinese companies in the U.S. As a result, the tech industry in China was hit hard and its employment suffered greatly. Xi Jinping was even forced to propose the ideas of “internal circulation” and “industrial independence,” soon to be left high and dry.
It is generally expected that Biden will not reverse the current anti-China policy of the U.S. after he takes office. This is because Biden once signed an article to state that tough measures should be taken against China, otherwise China will continue to steal technologies and intellectual properties from the U.S. and American companies. China will also continue to give state-owned enterprises unfair advantages in dominating future technologies and industries by heavily subsidizing them. China is also expanding its global influence through long-term plans, promoting specific political models and investing in future technologies. Although these views of Biden are not different from those of Trump’s, Biden emphasizes international cooperation and regards Russia as the primary threat instead of China. He also said that he was looking forward to cooperating with China on issues that are in the interests of the U.S. On the other hand, the Democrat Party has been regarded as the aristocratic party that doesn’t pay as much attention as Trump to the issue of employment with “jobs stolen by the Chinese.” Coupled with Biden’s close personal ties with China in the past, the U.S. defiance of China has been generally acknowledged to ease.
Easing tension with China becoming its external life support
So far it has been difficult for everyone to specify the content of Biden’s global and China policies of trade and economics. One can only be assured that Biden will abandon the unilateralism of Trump in terms of foreign policies, and he will seek international cooperation to fight against China. However, it must be noted that despite the series of radical measures against China by the Trump administration, the Chinese economy has survived to this day. The “easing” by the Biden administration is likely to become an external life support for the Chines economy, which will not only continue to live but be further strengthened.
Therefore, it is worthy to observe whether the various changes that occurred under Trump will be reversed, such as the withdrawal of foreign investment, the concrete formation of a non-China supply chain, and the Indo-Pacific strategy blocking the Chinese economy.
As far as Taiwan is concerned, during Trump’s presidency, apart from military support and Taiwan’s international participation, the most important aspect of U.S.-Taiwan relations is the strengthening of economic relations. In the past two years of the Sino-American war on trade and technologies, the return of investment by Taiwanese companies back to Taiwan has been the biggest support of the growth of Taiwan. The investment rate of Taiwan has risen sharply to almost 24% from around 20% over the years, and exports to the U.S. have also increased significantly. The economic performance hasn’t been hit as expected, but it has been taking the lead among the Four Asian Tigers, breaking the deadlock of many years.
After the outbreak of the Wuhan pneumonia this year, foreign investment in China has withdrawn. Countries such as the U.S. and Japan have not only provided subsidies to accelerate the return of their businesses from China but also joined forces with countries such as Australia, India, and Taiwan to form new supply chains with great fanfare. This attempt to untangle China’s supply chain could be regarded as the most concrete result of the U.S. “Indo-Pacific Strategy.”
The most important significance of this development to Taiwan is to find a pivot to break away from its years-long economic dependence on China and to seize the real opportunity for its economy to be integrated into advanced markets dominated by the U.S. It is also an opportunity for Taiwan to gain momentum for its New Southbound Policy and to walk away from the periphery of the Chinese economy to the central stage of the world economy. With the surge of Wuhan pneumonia raging, Taiwan has become the only country with a growing economy, and people have great pride. We could say that without the harsh measures against China by the Trump administration, Taiwan could hardly enjoy the current performance and confidence in economics. For many, Trump is unpredictable, but for Taiwan, his pro-Taiwan policy has been consistent and the most predictable. On the contrary, Biden’s China policy and Taiwan policy still remain hazy, which put Taiwan on pins and needles.
Taiwan to maintain international connection and economic independence
Faced with the new situation, the most important idea for Taiwan should be striving to maintain the gradual formation of international connection and economic independence, avoiding the old path of dependence on China. Although the new supply chain and a potential bilateral trade agreement (BTA) initiated by the U.S. are tempting, and the current economic strength of Taiwan also deserves to be appreciated by the U.S., Taiwan still needs to work hard to upgrade its industries and to maintain the resilience of its own economy to ensure long-term development in the ever-changing international environment.
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