Geo-Strategic Trend - 14. page

According to Major Taiwanese media network Liberty Times Network (LTN), Taiwan’s Ministry of Finance recently announced that the proportion of Taiwan’s exports bound for China (including Hong Kong) in the first four months of this year dropped to 30.7 percent – the lowest level seen in 22 years. LTN reported that global supply chains are diversifying amid China’s economic weakness and tensions between China and the U.S.

For many years, Taiwan’s proportion of exports to China has hovered around 40 percent. It’s worth noting that Taiwan’s exports of semiconductors and other electronic components to China are in particularly steep decline. Taiwan’s Ministry of Finance explained that, in addition to the slow recovery of China’s internal demand, the supply chain for digital electronics and other commodities has shifted outside of China, thus reducing Taiwan’s exports to China.

From January to April of this year, Taiwan’s overall exports increased by 10.6 percent, exports to the United States increased by 64 percent, and exports to ASEAN countries increased by 25 percent. Taiwan’s proportion of exports bound for the United States reached 23.5 percent, while exports to ASEAN countries reached 19.5 percent of Taiwan’s total exports.

Encouraged by U.S. customers, Taiwanese companies have been diversifying their supply chains ever since China-US tensions began to worsen starting in 2010. They have been diversifying their production locations by moving some of their production capacity from China back to Taiwan or to other locations such as the United States, Southeast Asia, and elsewhere.

Source: LTN, May 9, 2024
https://ec.ltn.com.tw/article/breakingnews/4666984

Deutsche Welle Chinese Edition recently reported on the 2024 Business Confidence Survey just released by the European Chamber of Commerce. The survey showed that uncertainty for European companies in China has increased due to China’s economic slowdown as well as the Chinese government’s prioritization of domestic companies over foreign companies and its unclear regulations.

Jens Eskelund, president of the European Union Chamber of Commerce in China, said that companies are beginning to realize that low demand [within China] may persist for a long time. He also said that companies saw other countries emerging and becoming competitors that China must take seriously.

More than one-third of survey respondents observed overcapacity within their respective sectors of the Chinese economy. Although China reopened its economy [by lifting COVID controls] in early 2023, the survey results indicate a continued decline in market confidence.

The development of European companies in China is hindered by structural problems in China’s economy. These include weak domestic demand, increasing overcapacity, ongoing real estate difficulties, market access issues, regulatory barriers, and other obstacles. More than half of surveyed companies reported China’s economic slowdown as a top challenge, a significant increase over previous years’ survey results. Around 52 percent of companies surveyed plan to cut costs; about a quarter of such cost cutting will be achieved through layoffs.

The Chinese government has been sending mixed signals to foreign companies as it pursues economic development while simultaneously tightening regulations related to national security and safety.

Source: DW Chinese, May 10, 2024
https://p.dw.com/p/4fhW1

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the British government has announced plans to remove Chinese-made surveillance equipment installed in sensitive locations by April 2025.

The UK is increasingly concerned about Chinese espionage. In November 2022, British authorities stated that surveillance systems produced by companies subject to China’s national intelligence laws should not be used in sensitive places such as British government buildings and military bases. About half of the Chinese-made surveillance equipment installed in some sensitive locations has been replaced, and progress is being made in removing Chinese-made surveillance equipment in the remaining locations. Deputy Finance Minister Alex Burghart said in a statement that the work of dismantling the remaining equipment is being stepped up, and that about 70 percent of the job will be completed by October this year. UK lawmakers have also called for a ban on the sale and use of security cameras made by China’s Hikvision and Dahua over privacy concerns.

Chinese spies are targeting British officials holding sensitive positions in politics, defense and business in an attempt to extract secrets from them. British police last week charged two men with spying for China, one of whom allegedly worked as a researcher for a prominent member of the British Parliament.

Source: Lianhe Zaobao, April 29, 2024
https://www.zaobao.com.sg/realtime/world/story20240429-3531404?amp

“Chilean salmon, Ecuadorian white shrimp, Peruvian blueberries, Argentine beef, coffee from Brazil and Colombia, …, are becoming common treats on Chinese dining tables,” reported People’s Daily.

The newspaper accredited the new development in Chinese culinary fare to the increasing maturity of transport routes linking China and Latin American countries. Sea freight routes between China and Latin America are mature, reported the article, covering most of the important ports in Latin American countries. Air freight routes have developed rapidly over the past five years, mainly in the two major Latin American cargo distribution centers in Mexico City, Mexico, and São Paulo, Brazil.

From 2000 to 2022, the total trade volume of goods between China and Latin America increased by a factor of 35, while the trade volume between Latin America and other parts of the world only increased by a factor of 4 during the same period. China remains the second largest trading partner of the Latin American region as well as the largest trading partner of several Latin American countries including Brazil, Chile, Peru, and Uruguay.

Source: People’s Daily, May 2, 2024
http://world.people.com.cn/n1/2024/0502/c1002-40227962.html

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that the European Commission raided the offices of Chinese companies in Europe on April 23, conducting inspections on the grounds that the companies have allegedly accepted foreign subsidies. This is the fifth subsidy investigation launched by EU since February 2024. All such subsidy investigations have targeted Chinese companies. This was the first time such an investigation has led to an on-site search.

The head of the Trade Remedy Bureau of the Chinese Ministry of Commerce told the press that the Chinese industrial community was shocked and was strongly dissatisfied with this move by the EU. He said the European Commission directly raided normal office premises and detained regular business operating equipment without prior warning or legal notice, violating the principles of due process. The Sina article stated that “In a series of recent investigations conducted by the EU, the purpose has been clear, the rules and procedures have been abused, and the investigation tools have been weaponized… China will pay close attention to the EU’s subsequent developments and take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.”

Source: Sina, April 24, 2024
https://news.sina.com.cn/c/2024-04-24/doc-inasxuyu8421014.shtml