Taiwan is more dependent on China for trade than the US, even as US House Speaker Nancy Pelosi threw her weight behind Taiwan this week in a high-profile visit.
Taiwan came under military and economic pressure from Beijing this week after the self-ruled island allowed a visit by Pelosi – the highest-ranking US official to set foot in Taiwan in 25 years.
Taiwan’s business and economic ties with mainland China and Hong Kong have grown so much that the region is by far the island’s largest trading partner, CNBC reports.
Many large Taiwanese companies in high-tech industries, such as the world’s largest chip maker, Taiwan Semiconductor Manufacturing Co. or TSMC, operate factories in mainland China.
Last year, mainland China and Hong Kong accounted for 42 percent of Taiwan’s exports, while the U.S. had a 15 percent share, according to official Taiwanese data accessed by Wind Information.
In total, Taiwan exported $188.91 billion worth of goods to mainland China and Hong Kong in 2021. More than half were electronic components, followed by optical equipment, according to Taiwan’s Ministry of Finance.
Taiwan’s exports to Southeast Asia were even larger than those to the US, at $70.25 billion to the region, compared with $65.7 billion to the US, the data showed.
As Taiwan’s source of imports, Mainland China and Hong Kong again took the top spot with a 22% share. The US had just a 10% share, ranking behind Japan, Europe and Southeast Asia.
Increase trade with mainland China
In recent years, Taiwan has bought more and more products from mainland China and vice versa.
Over the past five years, Taiwan’s imports from mainland China have grown by about 87% compared to a 44% increase in imports from the US.
Taiwan’s exports to mainland China grew 71% between 2016 and 2021. But exports to the US nearly doubled, rising 97%.
Taiwan’s top product purchases from the U.S. include electrical machinery, vehicles, plastics and iron and steel products, according to U.S. government data.
Many Taiwan-based companies – such as Foxconn, an Apple supplier – operate factories in mainland China.
In 2021, Taiwanese businesses received $200.1 billion in US export orders, according to the US Congressional Research Service.
According to the 2020 census, about 157,900 people from Taiwan resided in mainland China, a decrease of about 7% from the previous decade.
The entire island of Taiwan was home to about 23.6 million people in 2020, slightly less than Shanghai’s then population of about 25 million people.
However, Taiwan’s economy is bigger than Shanghai’s, at about $781.58 billion compared to $680.31 billion last year, according to official data. In 2021, Shanghai’s share of mainland China’s GDP was 3.8%.