Taipei, Taiwan must seize the opportunity to work with major economies seeking to relocate global supply chains outside of China amid the COVID-19 pandemic, domestic scholars suggested as President Tsai Ing-wen (蔡英文) begins her second term on May 20.
The pandemic, which has made many countries aware of their growing economic dependence on China for goods in several critical sectors, has led to calls to delink global supply chains of major industries from China.
That trend offers an extremely good opportunity to Taiwan, said Ray Yang (楊瑞臨), consulting director of the Industry, Science and Technology International Strategy Center (ISTI) under the Industrial Technology Research Institute (ITRI).
He said the United States, China and Europe may all look to develop independent production capabilities in the post-COVID-19 world, and Taiwan has an opportunity to become an important partner for all of them.
Yang said the U.S. will still be the world leader but cannot go it alone and will itself have to form partnerships with economies such as the EU, Japan, South Korea and Taiwan.
Taiwan is well positioned, Yang said, because the COVID-19 crisis has opened the world’s eyes to the strengths of Taiwanese businesses, including their ability to respond quickly to different situations, high degree of flexibility and quality of manufactured goods.
That was seen most clearly in Taiwan’s ramping up of production of face masks and protective gear for medical workers to meet high demand during the coronavirus epidemic, he said.
Meanwhile, Darson Chiu (邱達生), a research fellow at the Taiwan Institute of Economic Research, predicted that the U.S. economy would recover faster from the coronavirus pandemic than China.
That trend has already prompted more Taiwanese businesses operating overseas to increase investment in Taiwan and reduce investment in China and other countries, Chiu said.
Chiu also contended it will be in Taiwan’s interests if the United States create an alliance of “trusted partners” to restructure supply chains away from China, as has been reported.
According to a Reuters report in early May, the alliance would apply common standards for everything from digital business, energy and infrastructure to trade, education and commerce, with Japan, South Korea, New Zealand, Australia, India and Vietnam among potential partners.
Though Taiwan is not on the list of “trusted partners,” it is a reasonable assumption that Taiwan has an opportunity to be included in the next phase given that Taiwan is considered a partner in the U.S.’s “Free and Open Indo-Pacific strategy,” Chiu said.
“We must let the United States know that Taiwan can make its planned supply chains more complete,” Chiu said, pointing to Taiwan’s semiconductor industry’s advantage in wafer fabrication and packaging and testing technology, which would help build the U.S.’s IC design capabilities.
Taiwan’s small and medium-sized enterprises’ strength in producing spare parts and component production could also strengthen those new supply chains, Chiu said.
Source: Focus Taiwan News Channel