BEIJING — Data show that Taiwan depends more on China for trade than it does on the U.S., even if U.S. 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 democratically self-ruled island allowed the visit of Pelosi — the highest-ranking U.S. official to set foot on Taiwan in 25 years.
The visit came despite warnings from China, which considers Taiwan part of its territory and maintains the island should have no right to conduct foreign relations. The U.S. recognizes Beijing as the sole legal government of China, while maintaining unofficial relations with Taiwan.
Still, Taiwan’s business and economic ties with mainland China and Hong Kong have grown so large that the region is by far the island’s largest trading partner.
Many large Taiwanese companies in high-tech industries such the world’s biggest chipmaker — Taiwan Semiconductor Manufacturing Co., or TSMC. — operate factories in mainland China.
Last year, mainland China and Hong Kong accounted for 42% of Taiwan’s exports, while the U.S. had a 15% share, according to official Taiwan data accessed through Wind Information.
In all, Taiwan exported $188.91 billion in goods to mainland China and Hong Kong in 2021. More than half were electronic parts, followed by optical equipment, according to Taiwan’s Ministry of Finance.
Taiwan’s exports to Southeast Asia were even greater than those to the U.S. — at $70.25 billion to the region, versus $65.7 billion to the U.S., the data showed.
As a source of Taiwan’s imports, mainland China and Hong Kong again ranked first with a 22% share. The U.S. only had a 10% share, ranking behind Japan, Europe and Southeast Asia.
Growing trade with mainland China
In recent years, Taiwan has bought an increasing amount of products from mainland China, and vice versa.
Over the last five years, Taiwan’s imports from mainland China have surged by about 87% versus 44% growth in imports from the U.S.
Taiwan’s exports to mainland China grew by 71% between 2016 and 2021. But exports to the U.S. nearly doubled, growing by 97%.
Top U.S. purchases of Taiwan’s goods include electrical machinery, vehicles, plastics and iron and steel products, according to U.S. government data.
Many Taiwan-based companies — such as Apple supplier Foxconn — operate factories in mainland China.
In 2021, Taiwan businesses received $200.1 billion in U.S. export orders, according to the U.S. Congressional Research Service.
Comparable to Shanghai
According to a 2020 census, about 157,900 people from Taiwan resided in mainland China, a roughly 7% decrease over the preceding decade.
The entire island of Taiwan was home to about 23.6 million people in 2020, slightly less than Shanghai’s population of roughly 25 million people at the time.
However, Taiwan’s economy is larger than Shanghai’s, at about $781.58 billion versus $680.31 billion last year, according to official figures.
In 2021, Shanghai’s share of mainland China’s GDP was 3.8%.
CNBC