No Recognition but Trade goes on

Despite having no official relations China is Taiwan’s largest trading partner and the US comes in a close second. Both countries maintain no official relations yet their two way annual trade rose to US $ 328 billion and the ready supply directly from Taiwan of processor chips is a core component for assembling of smartphones and other electronics in China’s factories.

Territorial Claims Notwithstanding

China’s official position is that “ Taiwan is an inalienable part of China’s territory and the Government of the People’s Republic of China is the sole legal government representing the whole of China as recognized by United Nations General Assembly Resolution 2758 of 1971. Since the founding of the People’s Republic of China in 1949, 181 countries have established diplomatic relations with China on the basis of the one-China principle “

Credit BBC

China needs Taiwan’s Chips

Credit Asia Times

Intriguingly integrated circuits (chips) were 62 % of Taiwan’s exports to mainland China and Chinese Customs data shows it at US $155 billion last year. Economies of China and the island of Taiwan are completely integrated or almost one economy.  Taiwan’s imports of around 24 % are from China .Taiwan’s exports to China and Hong Kong stand at around 40% of Taiwan’s total exports. Taiwan manufactures most of the world’s processor chips and China lags behind in semiconductor industry technology.

Taiwan Invests heavily in China

Credit CNBC

Taiwan is home to more than 90% of the manufacturing capacity for the world’s most advanced semiconductors. In the last three decades Taiwanese companies invested around $ 190 billion inside mainland Chinese companies including chipmaker Foxconn, a China-listed Foxconn Industrial Internet subsidiary.Companies in China manufacture iPhones for Apple, Galaxy smartphones for Samsung and game consoles for Sony.

Nancy’s Hype

Credit The Jerusalem Post

China considered  Nancy Pelosi US Speaker visit to Taiwan as an affront but is nowhere near considering an outright assault on Taiwan.Despite the provocative visit to Taiwan by Nancy Pelosi  China remains Taiwan’s largest trading partner revealing how economics prevails over military aggressiveness.

Credit New York Post

Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s most critical chip manufacturer and semiconductors are vital in consumer products and also military aircrafts.Revenues from China and the US are 10 % and 50 % respectively.China carried out massive air and naval military exercises in the straits at the time of Nancy’s visit. Despite no official relations their multibillion dollar annual trade is worth $ 166 billion annually. Trade takes precedence over hostilities it seems

By Nadir Mumtaz