The Chinese Communist Party (CCP) has not given up the idea of “reunifying Taiwan by force” and nearly every day dispatches military aircraft and vessels to harass Taiwan. Xie Jinhe, Chairman of Taiwan’s Wealth Magazine, wrote an article titled “Who Killed China’s Economy?” He pointed out that the CCP’s military maneuvers around Taiwan, showcasing its muscles, come at a cost, and the financial resources expended in challenging other countries are even more worrying.
China’s economy is weakening, with a continuous rise in unemployment and a steady outflow of foreign capital from China. Xie Jinhe recently mentioned on Facebook that after the conclusion of the Third Plenary Session of the Twentieth Central Committee of the CCP, Zhu Fenglian, the director of the Taiwan Affairs Office, urged Taiwanese businessmen to “share the opportunities for Chinese-style modernization.” This statement has been met with ridicule and sarcasm in Taiwan, as there have been few positive responses. The reason is that after thirty years of rapid growth, the Chinese economy is now facing the difficult challenge of adjusting due to the bursting bubble, exacerbated by the escalating tensions in the US-China cold war.
Recently in Taiwan, there is an increasing number of discussions about the deteriorating economy of mainland China. For instance, some people have noted that the cost of a connecting flight through Beijing is more than half the price of a similar flight from Taipei. For a European-bound flight from Taipei, a premium economy seat on Taiwan’s EVA Air costs over 50,000 NTD, while a business class seat is around 200,000 NTD. If flying through Beijing, an economy class seat costs only 20,000 NTD, while a business class seat is less than 100,000 NTD, because Beijing airport is less crowded.
“In the past, Taiwanese businessmen believed the (Mainland China) market was vast, leading to a rush of Taiwanese restaurant operators investing in China (Mainland). Now, everyone is rushing to close down shops, with major brands like Eighteen Degrees relocating to the USA, and ’85 Degrees C’ facing significant challenges. In May this year, Mos Burger also withdrew… The (Mainland China) market is huge, but purchasing power is facing difficult adjustments after the bursting of the bubble,” Xie Jinhe said.
Xie Jinhe mentioned that since the 1990s, Taiwanese businesses were highly welcomed in mainland China, benefiting from tax incentives and treated by officials as VIPs. But now, the situation has changed drastically, with Taiwanese businesses facing tax pressures and a much tougher environment. In recent years, with frequent incursions of Chinese military aircraft circling Taiwan and the introduction of the Taiwan version of the “Anti-Secession Law,” the CCP can conduct trials and even convict individuals advocating for the Republic of China (Taiwan) from afar. Traveling from Taiwan to mainland China used to be relaxed, but now one has to be cautious at every step, illustrating the significant changes over the past thirty years.
Regarding the recent typhoon Keimi hitting Taiwan, Xie Jinhe noted that Chinese military aircraft continued to circle Taiwan, interpreting these actions as a display of military power that comes at a cost.
The Ministry of National Defense of the Republic of China released information on the activities of Chinese military aircraft, stating that from 6 a.m. on the 28th to 6 a.m. today, there were 18 instances of Chinese aircraft encroaching on Taiwan’s airspace (with 13 instances overstepping the median line of the Taiwan Strait and harassing the airspace in the northern, central, southwestern, and eastern regions), as well as 14 instances of Chinese vessels, continuing activities around the Taiwan Strait. The Taiwanese military is closely monitoring and responding with the use of aircraft, ships, and shore-based missile systems.
Since the 1990s, China became the world’s factory, and after joining the WTO in 2001, its economy surged forward, bringing prosperity to its people. But now, that era has come to an end, and CCP leaders should allow the people to recuperate, focus on improving livelihoods, and rebuild their strength. However, the CCP remains engaged in conflicts with other countries, placing further financial strain that exacerbates the challenge of adjusting to the deflating economic bubble.
Xie Jinhe pointed out that since the 1990s, almost all of Taiwan’s investments have been directed to mainland China. However, now, not only are new investments shrinking, but there are efforts to repatriate funds back to Taiwan. The recent passage of the “Anti-Secession Law” has increased pressure on Taiwanese businesses to withdraw from mainland China. Previously, Taiwanese individuals brought money and people to mainland China, a significant factor contributing to China’s rapid economic rise. Yet, as the CCP employs increasingly harsh measures against Taiwan, this support has dwindled.
The Ministry of Economic Affairs of the Republic of China stated that in 2023, the total foreign investment exceeded $11.2 billion, a decrease of 15.40% annually but still the third-highest in nearly sixteen years. The investment in mainland China last year was about $3 billion, the lowest in twenty-one years, and for the second consecutive year lower than investments in New Southbound countries, indicating Taiwanese businesses are adjusting their global layouts to diversify risks. According to statistics, Taiwanese investments in mainland China hit a record low in 2023, decreasing from 83.8% in 2010 to 11.4% last year.
Xie Jinhe emphasized that treating Taiwan well is a crucial step in overcoming China’s economic decline. However, despite the Taiwan Affairs Office’s rhetoric about Taiwanese businessmen “sharing the opportunities for Chinese-style modernization,” that opportunity has passed. The repatriation of money back to Taiwan in recent years is one of the most significant reasons for Taiwan’s recent economic boom, a core issue seemingly overlooked by the Taiwan Affairs Office.
On the 18th, Minister of Foreign Affairs of the Republic of China, Joseph Wu, met with a joint delegation of the World Taiwanese Chamber of Commerce. Minister Wu emphasized the Foreign Ministry’s commitment to President Lai Ching-te’s goal of making “every day an economic day” for the country. By combining funds, technology, and talent, the ministry aims to promote economic diplomacy and the “Prosperous Nation Project,” narrowing the gap between Taiwan and like-minded countries through trade and investment, allowing Taiwanese businesses to seize opportunities during the critical moment of global supply chain reconfiguration. This cooperation aims to benefit both Taiwan and its allies. In the future, the Foreign Ministry will strengthen relations with important trading partners through initiatives such as signing investment protection agreements, enhance communication and service with Taiwanese businesses worldwide, and work collectively to support Taiwanese entrepreneurs from a diplomatic perspective.