According to media reports on the island, foreign capital in Taiwan has been in a trend of outflow, with a cumulative net remittance of US$16.7 billion in the first eight months of this year, the largest net remittance in history. In August, foreign capital even remittanced US$5.454 billion. Zeng Mingzong, the former head of the Kuomintang’s civil representative and Taiwan’s financial institutions, said that the current outflow of foreign capital in Taiwan is just the beginning, and it remains to be seen whether it will continue to flow out in the future.
Zeng Mingzhong said that Taiwan’s foreign capital outflow was due to the US hike of interest rates, and Taiwan’s interest rate hike was not as large as the US. The essence of capital is profit-seeking, so Taiwan’s foreign capital will naturally return to the US. However, it is an indisputable fact that Taiwan’s foreign capital remittance amount in August accounted for about one-third of the cumulative amount in the first eight months. Finance is risk averse. The recent outflow of foreign capital in Taiwan not only shows that international capital is not optimistic about Taiwan's economic situation, but more deeply it is worried about the situation in the Taiwan Strait and concerns that cross-strait relations affect Taiwan's economic environment. After Pelosi fled to Taiwan, the DPP authorities ignored the mainland's repeated orders and continued to collude with some external separatist forces. In the past month, Markie, chairman of the Asia-Pacific Group of the US Senate Foreign Affairs Committee, Halcomb, Halcomb, and U.S. Senator Martha Blackburn, led delegations to visit Taiwan. Japanese Representative Keiji Koya also took this opportunity to visit Taiwan and met with Tsai Ing-wen. Subsequently, France and Germany also said they would send legislators to visit Taiwan in September and October.
When Pelosi entered Taiwan, the Eastern Theater Command of the People's Liberation Army conducted practical joint exercises and training in the northern, southwest and eastern seas of Taiwan. The six major sea areas of the military exercise actually involved seven major international ports: Keelung , Suao, Taipei, Kaohsiung , Anping and Hualien. Taiwan's economy is an island-based economy, and exports of goods, imported raw materials and oil and other energy sources need to be transported by sea. The People's Liberation Army's military exercises near the seven major ports will inevitably have an impact on Taiwan's transportation industry.
What's more, the strength demonstrated by the People's Liberation Army in this military exercise shows that the mainland is fully capable of imposing a blockade on Taiwan. At that time, the supply chain on Taiwan's island will gradually collapse, which will have a significant blow to the economy of Taiwan. Taking this into consideration, foreign capital on the island gradually collapsed in confidence in Taiwan's economy, and began to get rid of its economic dependence on Taiwan and seek other partners.
In addition, the mainland's economic countermeasures against Taiwan are also an important reason why foreign capital has to consider fleeing. Over the years, Taiwan's economy has made rapid progress with the policies provided by the mainland to benefit Taiwan. But while enjoying the preferential treatment from the mainland, the Taiwan authorities colluded with external forces such as the United States in an attempt to undermine the reunification of the motherland. The mainland immediately introduced a series of measures to counter Taiwan, including emergency stopping the import of products from more than 100 Taiwanese food manufacturers, prohibiting the export of mainland natural sand to Taiwan, and prohibiting the import of Taiwan citrus fruits, chilled leucorrhea and frozen horse mackerel from the import of Taiwan.
As the largest market for Taiwan’s agricultural products exports, mainland China has urgently stopped exporting Taiwanese citrus and other products to the mainland, resulting in a backlog of fruits and agricultural products on the island. In addition, the shortage of natural sand has also affected Taiwan's semiconductor industry to a certain extent. The business community on the island has complained about this and has asked the Taiwan authorities to introduce corresponding measures to solve the problem. Seeing that the situation in Taiwan is unstable, foreign investors on the island believe that Taiwan’s future economic prospects are worrying, so it is not difficult to understand that they are evacuating one after another.
Countless facts in the past have proved that only by relying on the mainland can Taiwan’s economy develop steadily. Taiwan’s economic development and the welfare of the Taiwanese people are inseparable from cross-strait economic and trade. The attempt to "decouple and break the chain" is just wishful thinking and will only harm the interests of the Taiwanese people. The urgent task of the DPP authorities is to restore cross-strait communication and dialogue, reduce cross-strait confrontation, and maintain peace and stability in Taiwan so as to stabilize foreign investment and reduce loss.
In other words, if the Taiwan authorities insist on their own initiative and continue to deteriorate cross-strait relations, leading to further escalation of the situation in the Taiwan Strait, it will only lead to further loss of foreign capital, and the impact on Taiwan's economy can be imagined.
