Taiwan has been hit hard by the US trade war against China. According to the latest released data, Taiwan's exports fell sharply in January. This decline was recorded by 19.3 percent as compared to January 2022. Before this, in December, there was a 23.2 percent decline in exports as compared to the year before.
According to experts, Taiwan has been most affected by the chip and semiconductor restrictions imposed by the US on China last October. Taiwan is the number one country in the world in the chip industry. Chip exports from Taiwan to China have declined sharply since October. According to a report published on the website Asia Times, after 2009, there had never been such a decline in the export of integrated circuit chips from Taiwan to China. After the US sanctions, orders received by Taiwanese companies from China and Hong Kong have declined by 45.9 percent.
The Asia Times report said that Japanese and South Korean companies have also been hurt by the US sanctions. This has derailed the economic reforms of Japanese Prime Minister Fumio Kishida. Due to this, there has been a huge decline in his popularity. Kishida supported the US sanctions imposed on China. That's why Nikon Corp, Tokyo Electron, and other Japanese tech companies have had to stop their chip business with China.
But the worst impact has been on Taiwan. In the last quarter of 2022, Taiwan's economy contracted by 0.86 percent. Taiwan's economy had not shrunk this much in any quarter since the 2008–09 global economic downturn. Taiwan's Ministry of Economic Affairs has said that there is currently no hope of increasing exports. The ministry has said in its statement- 'The risks of recession in the global economy remain, which may have an impact on the orders received for exports to Taiwan.'
According to Huang Yu-ling, head of the ministry's statistics department, a survey was conducted among 2,000 companies, of which 70 percent said they were unlikely to get more orders from China. On this basis, the ministry has estimated that compared to February 2022, Taiwan's exports may decline by 10 percent in this February.
HSBC Bank economist Frederick Neumann has said- 'Taiwan has a special role in the global tech supply chain, so the difficulties of the global electronic sector will have a special impact on Taiwan.'
On the other hand, there has been a huge decline in the orders received by South Korean tech companies. Due to this, companies like Samsung Electronics and SK Hynix have reduced their profit estimates. The Asia Times report said that China was the biggest market for South Korea's semiconductor industry. Because of that, this industry has been a major contributor to the economy of South Korea. But now the face has changed.
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