China is Taiwan's biggest economic partner; trade with US declining
With Taiwan's exports substantially contributing to the Southeast Asia region, more than the US, China is exhibiting its strength in keeping the Taiwan economy growing, especially during the rise of geopolitical tensions.
A recent Taiwanese study reveals that the island depends more on China than it does on the US for trade.
US purchases of Taiwan’s goods include mainly electrical machinery, vehicles, plastics, iron, and steel products. Taiwan is considered a major manufacturer in the key-chip industry.
More exports to the Asian region than to US
Although the US recognizes Beijing as the sole legitimate government of China and maintains unofficial relations with the island, Taiwan’s business and economic ties with China and additionally Hong Kong have grown so large that China is by far considered its largest trading partner.
The analysis of data published through Wind Information indicates that China accounted for 42% of Taiwan’s exports, as opposed to the US’ 15% share. In total, Taiwan exported $188.91 billion in goods to China and Hong Kong just in 2021.
Read more: Pelosi plans to visit Taiwan prompt markets to plunge
In addition, Taiwan’s exports to Southeast Asia were even greater than those to the US, amounting to $70.25 billion to the region compared to $65.7 billion to the US, as per the data.
US Speaker of the House Nancy Pelosi’s visit to the island, however, has left serious tensions in trade relations between China and Taiwan. The Chinese administration already took advanced steps to prepare the region during Pelosi's stay in Taiwan, such as in military drills, although it made a vow to reconcile with the island.
China has suspended the import of some fruits, fish, and natural sand from Taiwan as a result, and further voiced its plan to impose sanctions on Pelosi and her close relatives.
Global markets have already taken a fall as a consequence of the rising tensions between the trio.