Asia

One product China can’t afford to ban


China has banned imports of thousands of Taiwanese-made products since senior US politician Nancy Pelosi visited the self-governed democratic nation – but there’s one thing it can’t afford to give up.

While Beijing was quick to suspend products like seafood, citrus fruits, instant noodles, pastries, biscuits and cakes, forcing Taiwanese businesses to find customers elsewhere, one company can remain confident it won’t be told ‘no’.

Taiwan Semiconductor Manufacturing Co (TSMC) is the world’s largest contract manufacturer of microchips, which are used to power everyday items including phones, laptops, cars, watches and refrigerators across the world.

It is so important that Taiwanese people refer to TSMC as the “sacred mountain for protecting the country”.

David Leaney, an international supply chain management lecturer at Australian National University, told news.com.au that disruption to the manufacturing of the microchips would have “huge consequences” to many, if not all, industries.

“If the supply of microchips was interrupted, that has a massive impact on the world,” he said.

He explained that fortunately, China was “very dependent” on Taiwan for microchips, meaning even if tensions continued TSMC should remain safe.

If a conflict was to break out, while supply chain issues would be among the least of the world’s problems, it would be a problem nonetheless.

“In a military conflict, there’s not exports coming out of Taiwan, there’s not microchips coming out of Taiwan,” Mr Leaney said.

“From a supply chain perspective … I’m worried about very specifically the couple of ships taking Taiwanese microchips out to the rest of the world.”

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Taiwan exports suspended

Taiwan’s Ministry of Economic Affairs announced on Thursday it would spend NT$200 million ($A9.3 million) to help about 2000 companies affected by China’s recent bans market their products in other countries.

The plans include subsidising up to five overseas marketing campaigns for each company and holding pop-up events at shopping malls in southeast Asia, northeast Asia, Europe and North America, among other things, according to Taiwan’s Central News Agency.

This month is not the first time Beijing has taken aim at Taiwan’s exports.

China banned pineapple imports from the island in March 2021, citing the discovery of pests, in a move that was widely seen as politically driven.

Beijing has ramped up pressure on Taiwan since President Tsai Ing-wen took office in 2016, as she views the island as a de facto sovereign nation and not part of “one China”.

The Pelosi trip

Taiwan has been self-governing for more than 70 years and has never been under the rule of communist China, but Beijing considers the island its territory.

The Chinese government views any official visits to Taiwan by senior politicians from other countries as a provocation.

The trip by Ms Pelosi, the highest-profile elected US official to visit Taiwan in 25 years, ignited a diplomatic firestorm.

China has deployed fighter jets, warships and ballistic missiles in what analysts have described as practice for a blockade and ultimate invasion of Taiwan.

Beijing has indicated the series of military drills could continue indefinitely.

– with AFP

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