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Taiwanese exports to China record record high despite worsening cross-strait relations… “Semiconductor Traction”

picture explanation101 Building, a landmark in Taipei, Taiwan

Despite the assessment that the cross-strait (兩岸, China-Taiwan) relationship has deteriorated to the worst level in decades, Taiwan’s exports to China have significantly increased thanks to an increase in semiconductor demand last year.

The South China Morning Post (SCMP) reported on the 11th that, citing the latest statistics from the Ministry of Finance of Taiwan, Taiwan’s exports to mainland China and Hong Kong in 2021 reached an all-time high of $188.9 billion (about 225.9 trillion won). .

Last year’s export growth rate was 24.8%, which was twice the growth rate of 11.9% in the previous year.

Last year, Taiwan’s exports to mainland China amounted to USD 125.9 billion, up 22.9% from the previous year, and exports to the Hong Kong SAR reached USD 6.298 million, up 28.7% from the previous year.

It is analyzed that the export of electronic components such as semiconductors contributed greatly to Taiwan’s increase in exports to China.

In December of last year alone, Taiwan’s electronic components and audiovisual-related products exported to China increased by 23.3% and 19.9%, respectively, from the same month of the previous year.

A Taiwanese Ministry of Finance official, who requested anonymity, told SCMP that “US sanctions have been a major factor in the increase in demand for Taiwanese semiconductor chips. Mainland China wants to make their own semiconductor chips, but they (yet) cannot. “He said.

Despite the worsening of cross-strait relations, China’s dependence on Taiwan, especially in the semiconductor sector, increased, but Taiwan’s investment in China decreased.

According to statistics from the Taiwan Ministry of Economy, Taiwan’s investment in mainland China from January to November last year amounted to $4.79 billion, down 14.5 percent from the same period last year.

Amid the ever-increasing cross-strait conflict, the phenomenon of Taiwanese companies returning to Taiwan (reshoring) is becoming clearer.

Although China still strongly needs Taiwan, the center of the global semiconductor industry, the Taiwanese government, led by President Tsai Ing-wen (蔡英文), who is inclined to independence, is seeking a free trade agreement (FTA) with the United States in order to fundamentally diversify its export structure to reduce dependence on the Chinese economy. ) and joining the CPTPP.

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