Since Taiwan gained independence from China decades ago, the giant next door has been breathing down their neck. Indeed, the power of China reaches far and beyond geographical borders. Much of this power is rooted in the economic interplay between the countries. Indeed, while data shows that Taiwan depends more on China for trade than it does on the U.S, China still holds major influence on the state of the Taiwanese economy. Recently, after the U.S. House Speaker Nancy Pelosi visited Taiwan despite warnings from China to not do so, the DOW dropped by 400 points as tensions increased.
Taiwan came under military and economic pressure from Beijing this week which could continue to grow depending on the direction the US decides to take with Taiwan. This could pose a problem for the nation, because, although the US has a 15% share in Taiwanese trade, China, and Hong Kong account for a whopping 42% of Taiwan’s exports. This means, the ball is in China’s court when it comes to repercussions for Taiwan.
What do you think about the U.S’s position with China and Taiwan and will U.S government officials visit again?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.