Why Taiwan Matters
As China continues to lick its lips in anticipation of someday getting Taiwan, we should all be concerned. For those not in the know, China and Taiwan have had an interesting history, starting with Mao's ascension on the mainland, that resulted in a exodus of 2 million Chinese nationalists to Taiwan. The native Taiwanese were not happy with the move, and the unrest that followed resulted in martial law being declared by the Chinese minorities. It was only in the last 20 years or so that Taiwan gave up martial law and embraced democracy. Since then, Taiwanese have expressed a desire for independence from China -- which has at times caused China to hold military exercises in the waters between Taiwan and the mainland, and also prompted the US to send carrier battle groups to the region. The standoff today has China with anti-secession laws authorizing the use of military force should Taiwan declare independence, and Taiwan President Chen Shui-bian vowing to declare independence should Taiwan be attacked by China.
So what do we care? As this BusinessWeek article declares: "The global economy couldn't function without it." Taiwan businesses manufacture the engines of today's digital economy. Oh sure, the Koreans, the Chinese, the Indians and the first world nations contribute -- but Taiwan is the low cost operator that has brought down prices in everything from chips to the devices that use those chips. Taiwan manufactures a myriad of digital equipment under someone else's name. More and more design is being pushed to Taiwanese engineers. The ideas of the first world countries come to life in Taiwan -- to the amount of US$125 billion in revenues for the top 25 tech companies this year.
Should we worry? It doesn't hurt, but because of its global importance -- and importance to China itself, the chances of China doing something stupid are really slim. More and more, Taiwan is moving manufacturing to low cost China. In fact, if it wasn't for the Taiwanese management experience, China wouldn't be enjoying the rapid growth it's now enjoying. Like it or not, China has a dependence on Taiwan right now -- how long that lasts is a different story -- for now though, it should go a long way in tempering any indulgences in national pride China may want to make good on.
So what do we care? As this BusinessWeek article declares: "The global economy couldn't function without it." Taiwan businesses manufacture the engines of today's digital economy. Oh sure, the Koreans, the Chinese, the Indians and the first world nations contribute -- but Taiwan is the low cost operator that has brought down prices in everything from chips to the devices that use those chips. Taiwan manufactures a myriad of digital equipment under someone else's name. More and more design is being pushed to Taiwanese engineers. The ideas of the first world countries come to life in Taiwan -- to the amount of US$125 billion in revenues for the top 25 tech companies this year.
Should we worry? It doesn't hurt, but because of its global importance -- and importance to China itself, the chances of China doing something stupid are really slim. More and more, Taiwan is moving manufacturing to low cost China. In fact, if it wasn't for the Taiwanese management experience, China wouldn't be enjoying the rapid growth it's now enjoying. Like it or not, China has a dependence on Taiwan right now -- how long that lasts is a different story -- for now though, it should go a long way in tempering any indulgences in national pride China may want to make good on.
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