In recent years, China’s “Anti-Foreign Sanctions Law” has sparked considerable debate about its potential impact on Taiwan and its economic sectors, especially in the high-tech industries. Professor Endo’s article, How Xi Jinping Influences Taiwan’s Economy through the ‘Anti-Foreign Sanctions Law’, offers a compelling analysis of the implications of this legal framework for Taiwan’s economic future. While her argument focuses on the potential economic harms from China’s sanctions, my response offers a slightly different perspective, highlighting the dynamic nature of Taiwan’s economic strategy and its ability to navigate such geopolitical tensions. Below, I will summarize Professor Endo’s main points, introduce my contrasting view, and outline the broader implications of the “Anti-Foreign Sanctions Law” in the context of Taiwan’s industrial future.

Professor Endo’s Key Arguments

In her article, Professor Endo emphasizes several critical aspects of China’s “Anti-Foreign Sanctions Law” and its potential consequences for Taiwan. The law, which allows China to retaliate against foreign sanctions, has significant implications for Taiwan’s industries, particularly those involved in high-tech manufacturing such as semiconductors. Taiwan’s economy is deeply intertwined with the Chinese market, and Professor Endo argues that any sanctions targeting Taiwan’s core industries could severely damage its economic standing. She points to the risks of Chinese retaliation against Taiwan’s businesses, especially as Taiwan remains one of the global leaders in semiconductor manufacturing.

Furthermore, Professor Endo connects this law to broader Chinese geopolitical strategies, particularly under the leadership of Xi Jinping. She suggests that China’s legal framework might not only be aimed at foreign entities but could also be used to reinforce China’s long-standing goal of achieving Taiwan’s unification. The possibility of sanctions could force Taiwan to reassess its economic ties with China, ultimately reducing Taiwan’s leverage in the region and pushing it towards further political and economic dependence on China.

Professor Endo’s argument is compelling in its recognition of Taiwan’s vulnerability in the face of China’s assertive economic policies. She presents a valid concern that Taiwan’s industries, particularly in high-tech sectors, could suffer from the legal ramifications of these sanctions, which could make companies reluctant to engage with Taiwan. She also links this situation to the broader question of Taiwan’s geopolitical future and the challenges it faces in maintaining its economic and political independence.

A Different Perspective: Taiwan’s Adaptability and Global Supply Chains

While I agree with Professor Endo on several points, particularly the risks associated with Taiwan’s economic dependence on China, I believe that her analysis could benefit from a broader view of Taiwan’s strategic adaptability in the global supply chain. Taiwan’s economy, particularly its semiconductor industry, is not only tied to China but is also a critical player in the global technological ecosystem. In fact, Taiwan has been proactively diversifying its trade relationships and moving beyond its reliance on the Chinese market.

1. Taiwan’s Role in the Global Supply Chain

Taiwan’s economy is increasingly integrated into the global supply chain, and its industries are well-positioned to adapt to changing global dynamics. The semiconductor industry, while important in the context of cross-strait relations, is also highly globalized, with Taiwan’s key players, such as Taiwan Semiconductor Manufacturing Company (TSMC), expanding their manufacturing capabilities in the United States, Japan, and other regions. These moves are indicative of Taiwan’s efforts to reduce its dependency on any one market, including China.

The ongoing tensions between the United States and China, particularly in the tech sector, have prompted Taiwanese companies to relocate production facilities and invest in new markets. For example, TSMC’s plans to build a plant in Arizona reflect Taiwan’s strategic shift towards increasing its presence in the United States, reducing the risks posed by Chinese retaliatory measures. Therefore, while China remains an important player in Taiwan’s economy, Taiwan’s future economic growth is increasingly reliant on diversified global partnerships.

2. China’s “Made in China 2025” and the Competitive Challenge

While Professor Endo highlights the potential risks of China’s “Made in China 2025” initiative, I view this as a competitive challenge rather than a direct existential threat to Taiwan’s industrial future. Taiwan’s industries are highly innovative and have continually adapted to changing global demands. For example, Taiwan’s semiconductor sector, which is a key target of China’s technological ambitions, remains a global leader in terms of technological development and capacity. Taiwan’s firms are investing heavily in R&D to maintain their technological edge and remain indispensable in global supply chains.

While China’s push for technological self-sufficiency might challenge Taiwan’s market position in some areas, it also drives Taiwan to further innovate and seek new markets. Thus, the competition is not necessarily a sign of Taiwan’s economic decline but an opportunity for Taiwan to reaffirm its leadership in high-tech industries by continuing to innovate and diversify its business partnerships.

3. The Legal Framework of the ‘Anti-Foreign Sanctions Law’ and Its Strategic Implications

The “Anti-Foreign Sanctions Law” is undoubtedly a tool for China to assert its geopolitical power, but I believe its long-term impact on Taiwan’s industries may be overstated. Taiwan’s economy is highly resilient and adaptive, with businesses already working to minimize risks posed by such laws through supply chain diversification and expansion into new markets. Furthermore, Taiwan’s international importance as a key player in global technology will likely continue to provide it with leverage in negotiating trade relationships and mitigating the impact of China’s sanctions.

Taiwan’s government has also been proactive in seeking new trade agreements with the United States, Japan, and other global powers. These efforts may help buffer Taiwan’s industries from the full impact of China’s retaliatory measures. The geopolitical competition between China and the United States, while certainly challenging for Taiwan, also creates opportunities for Taiwan to strengthen its economic relationships with other global powers, thereby reducing its exposure to risks arising from China’s legal framework.

4. Impact of the ‘Anti-Foreign Sanctions Law’ on Taiwanese Businesses and Industries

One crucial aspect of China’s “Anti-Foreign Sanctions Law” is its expanding scope, especially as outlined in the recent “Implementation Regulations.” These regulations broaden the law’s applicability, potentially affecting Taiwanese businesses operating in China, as well as industries involved in cross-strait technology and cultural exchanges. The implications for Taiwanese companies—especially those in the technology and cultural sectors—are significant, as the law introduces additional legal risks that could complicate their operations within China.

For Taiwanese business owners with investments in China, these new regulations present an additional layer of uncertainty. While Taiwan’s industries, particularly those in high-tech sectors such as semiconductors, have become integral to the global supply chain, they are also heavily intertwined with China’s economy. The “Implementation Regulations” allow for broad interpretations of what constitutes “foreign sanctions,” meaning that Taiwanese businesses, which often work closely with foreign companies and adhere to international standards, may find themselves at risk of retaliation if their activities are perceived as conflicting with China’s geopolitical interests.

This is particularly concerning for businesses with significant operations in China. The growing legal and economic risks could prompt some Taiwanese companies to reconsider or alter their investments in China, especially in sectors like technology where regulatory frameworks are subject to rapid change. As Professor Endo points out, these shifts could have far-reaching consequences for Taiwan’s economy, as Chinese retaliatory measures against Taiwanese businesses could not only affect their profitability but also strain the broader economic relationship between Taiwan and China.

For the cultural industries, the risks are similarly profound. Cross-strait cultural exchanges, which have historically been a medium for mutual understanding and soft power, could face increasing obstacles. Taiwanese cultural enterprises may find themselves caught in the crossfire of political tensions, especially if their activities are seen as aligned with foreign interests that China seeks to sanction. This could stifle creativity and collaboration in sectors such as film, media, and art, which are vital for Taiwan’s international presence.

Thus, while Taiwan’s global integration remains a strength, the new regulations underscore the potential legal vulnerabilities faced by Taiwanese businesses and cultural institutions operating in China. As these sectors continue to play a central role in Taiwan’s economic future, understanding and managing these risks will be crucial for Taiwanese businesses looking to balance their cross-strait operations with international obligations.

Conclusion: Taiwan’s Future in a Multipolar World

In conclusion, while Professor Endo’s article provides a thorough analysis of the risks posed by China’s “Anti-Foreign Sanctions Law” and its potential impact on Taiwan’s economy, I would argue that Taiwan’s economic future is not solely determined by its relationship with China. Taiwan’s industries are resilient, innovative, and increasingly diversified, positioning the country to navigate the shifting dynamics of global trade and supply chains. While the “Anti-Foreign Sanctions Law” presents challenges, it is not likely to be a decisive factor in Taiwan’s industrial future. Instead, Taiwan’s ability to adapt, innovate, and forge strong international partnerships will shape its long-term economic security.

Both perspectives—Professor Endo’s focus on the immediate risks of Chinese retaliation and my emphasis on Taiwan’s adaptability and global integration—highlight important aspects of the ongoing geopolitical and economic discourse surrounding Taiwan. Understanding these different perspectives will help policymakers, businesses, and scholars better anticipate Taiwan’s path forward in a rapidly changing world.