Trade War Forces M’land to Be Self-reliant, Taiwan Can’t Only Be Satisfied with Order Transfers

  Trade War Forces M’land to Be Self-reliant, Taiwan Can’t Only Be Satisfied with Order Transfers

United Daily News Editorial (Taipei, Taiwan)

September 29, 2018

 Translation of an Excerpt

The US-China trade war has entered round three, and has been heating up; US President Trump has even extended the battleground to the United Nations, saying that Mainland China President Xi Jinping "may no longer be my friend." Mainland China, on the other hand, has released a white paper explaining its position; Xi Jinping also manifested his attitude in Heilongjiang, saying that the trade war "forces us to take the road of self-reliance, which is not a bad thing."

However, according to the Chinese side’s evaluation, if Trump loses in the mid-term elections, he would be humbled by the blow, an not daring to demand so much. Nobody knows whether or not Trump can drag on to the end of his term, so why should Beijing make concessions? Beijing can wait till after the mid-term elections

Optimistically, everyone expects that after the US mid-term elections, an opportunity will appear for resolution. The White House has announced that Trump will attend the November G20 summit in Argentina; the overtone is that at that time Trump and Xi Jinping would meet directly and could reach a truce and resume relations.

Xi Jinping stressed at the Davos Economic Forum last year that China would only march toward a path of more openness. This year, Premier Li Keqiang also reiterated reform and opening up. Perhaps the trade war’s crisis is an opportunity for change, an opportunity to change China's mode of market economy. If China wants to deepen its reforms or is even forced to undertake more reforms, it must open up market access, open the ratio of foreign capital in holdings; it would not be easy to succeed without the pressure of a trade war. Xi Jinping said that the trade war forced China to become self-reliant; it was the inspirational prep talk for dealing with the war.

The trade war also signifies the restructuring of the global trade order; European and Japanese firms will enjoy advantages in gaining from the US-China market, while Taiwan, sandwiched in the US-China wrangling, has mixed emotions. It is glad that the merchandise exported from the Mainland, impacted by higher tariffs, could transfer their orders to Taiwan through Taiwan businessmen on the Mainland, benefiting Taiwan’s exports, and even some industries would move their production lines back to Taiwan. However, what is worrisome is that many industries on the Mainland have obviously been impacted, Taiwan, being a link in China's industrial chain, would likely also be affected.

Different survey reports show that among the possibly hardest hit areas of the US-China trade war, Taiwan is the most vulnerable. Our government and industries should all be prepared for the eventuality; after all, when two elephants fight each other, the grass underneath will all suffer.

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