Good news, the ongoing rift between Beijing and Taiwan — a nuisance that constantly interjects itself into international affairs — is coming to an end. Taiwan will eventually submit to Beijing’s will.
Taiwan’s economic growth is growing more and more dependent on Chinese demand.
More signals of stronger than anticipated demand in China over the Lunar New Year holiday arrived from Taiwan’s Ministry of Economic Affairs today. The ministry reported that total export orders increased by 36.25% Y/Y, with Critical Electronic and Communications product segments increasing by 41% Y/Y and 44% Y/Y respectively.
The impact of last year’s direct trade agreement and other economic partnerships with China leaves Taiwan with a quandary: how to balance the massive opportunity presented by trade with the mainland with Beijing’s stubborn refusal to acknowledge the ROC as an independent state –let alone accept it. To date officials from both nations have for the most part politely sidestepped the issue in public in a process akin to family at a holiday dinner silently refusing to acknowledge underlying tensions. Inevitably it will bubble to the surface, but for now the denial is paying off handsomely for all.
More important that Taiwanese/Mainland relations this data –massive orders from Chinese purchasing managers remained in February despite the PBOC’s second reserve hike and the Holiday, supports the argument for further tightening measures by Beijing in the near term.
Photo: Waverly Advisors