Domestic & International Brief – December 2023

Morris Chang met with U.S. Vice President Kamala Harris on the sidelines of the APEC Leaders’ Summit held in San Francisco.


A selection of these news stories are also covered in AmCham Taiwan’s Executive Sweet podcast, available on Apple PodcastsSpotify and online, here.

Taiwan and UK Establish Trade Framework     

On November 8, Taiwan’s Office of Trade Negotiations (OTN) announced the signing of an Enhanced Trade Partnership (ETP) arrangement between Taiwan and the United Kingdom. The agreement establishes a framework for further bilateral talks covering digital trade, investment, renewable energy, and net-zero technology. The arrangement is Taiwan’s first trade framework signed with a European country.  

Given the UK’s ascension to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), analysts say that the ETP could prove helpful for Taiwan’s bid to join the multilateral agreement. According to OTN, bilateral trade between Taiwan and the UK totaled US$6.64 billion in 2022, making the UK Taiwan’s third-largest European trade partner after Germany and the Netherlands. 

Morris Chang Represents Taiwan at APEC Meeting

Taiwan Semiconductor Manufacturing Co. (TSMC) founder Morris Chang in November represented Taiwan for the seventh time at the annual Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit. Throughout the eight-day summit, which this year was held in San Francisco, Chang met numerous APEC leaders eager to engage in semiconductor development and discuss trade prospects with Taiwan.  

During the summit, Chang also met with U.S. Vice President Kamala Harris, Secretary of State Anthony Blinken, and Director of the National Economic Council Lael Brainard. Chang’s meeting with Brainard covered a wide range of economic topics, with both sides expressing hope for continued economic cooperation. 

The summit also included a meeting between U.S. President Joe Biden and Chinese Communist Party Leader Xi Jinping, during which Biden re-affirmed Washington’s commitment to maintaining the status quo in the Taiwan Strait. Taiwan’s Ministry of Foreign Affairs expressed gratitude for U.S. support and highlighted Taiwan’s commitment to bolstering its self-defense capabilities while deepening security ties with the United States to ensure regional stability. 

U.S. to Deploy Missiles in Deterrence Effort 

The United States is planning to deploy medium-range missiles, including the Standard Missile 6 (SM-6) and Tomahawks, to the Asia-Pacific region in 2024 as a deterrent against a potential Chinese attack on Taiwan. U.S. Army General Charles Flynn discussed these plans during the Halifax International Security Forum on November 19, confirming that the Army has already conducted tests of the missiles. 

The SM-6 and Tomahawk missiles offer advanced capabilities and extended ranges, with the Tomahawk capable of hitting targets up to 499 kilometers away. The move comes amid increasing concerns about China’s assertive behavior in the Indo-Pacific region. The Pentagon has also approved the potential sale of 400 Tomahawk missiles and related equipment to Japan as part of efforts to bolster regional security. 

Taiwan to Remain on U.S. Currency List                       

Taiwan remained on the currency manipulation watch list in the U.S. Treasury Department’s newly released semi-annual report on the macroeconomic and foreign exchange policies of major trading partners. Although the report stated that no significant trading partner had manipulated exchange rates over the previous year, Taiwan, China, Germany, Malaysia, and Singapore remained on the watch list.  

The report advised Taiwan to employ policies to protect the economy from external shocks, address structural issues to reduce external sector imbalances, and limit currency intervention while allowing the New Taiwan Dollar to move in line with economic fundamentals.  

Government Warns of China Investment Risk 

A government probe has found that of the 700 Taiwanese companies that had explored business opportunities in China, 68 had 100% risk exposure, the Taipei Times reported. Risk exposure is calculated by comparing the amount invested in a market with the net worth of the parent company. Excluding companies listed in the Cayman Islands and those with a parent net worth below NT$10 billion, 16 firms exceeded the 100% risk exposure mark.  

Paper manufacturing company Longchen Paper & Packaging Co. topped the list with an overexposure rate of around 166%. As of June 30, Longchen had invested NT$11.8 billion in China, or more than 50% of its parent company’s net worth. 

China announced in October that it was auditing the taxes of Hon Hai Precision Industry Co. (also known as Foxconn), sparking concern over the risks faced by Taiwanese firms with investments in China and Hong Kong. Hon Hai has invested more than NT$200 billion in China and had an overexposure rate of 117%. Taiwanese investment in China and Hong Kong totaled around NT$8.5 trillion (US$272 billion) as of June this year, according to government reports. 

Disinformation Threat Rising Before Election 

As Taiwan approaches its January 13 presidential election, it faces a “new wave of disinformation” emanating from China, according to a report in the November 26 New York Times. Despite China’s evolving and subtle disinformation tactics, Taiwan has demonstrated resilience against foreign meddling, given its mature community of fact-checkers, government investments, international media literacy partnerships, and a skeptical public, the report said. 

Minister of Digital Affairs Audrey Tang was quoted in the article as saying “the main idea here is just to stay agile.” Concerns regarding public apathy toward fact-checking and the subtlety of China’s disinformation campaigns persist, emphasizing the importance of continued vigilance and efforts to combat misinformation, the article noted.  

Presidential Candidates Register for Election

Three main candidates and their vice-presidential candidates formally registered with the Central Election Commission before the November 24 deadline. Democratic Progressive Party (DPP) presidential candidate Vice President Lai Ching-te registered with Taiwan’s former representative to the United States Bi-khim Hsiao as his vice-presidential candidate. Kuomintang (KMT) presidential candidate Hou Yu-ih selected Jaw Shao-kong, chairman of the Broadcasting Corporation of China, as his running mate. Taiwan People’s Party (TPP) presidential candidate Ko Wen-je teamed up with Cynthia Wu, currently a legislator-at-large for the TPP.  

Foxconn founder Terry Gou announced his withdrawal from the election race on November 24 and did not register his candidacy. He had previously collected enough signatures to be included on the ballot alongside his vice-presidential pick, actress Tammy Lai. 

Alert Issued for Mycoplasma Pneumoniae                  

The Centers for Disease Control (CDC) issued a health alert on November 26 instructing the medical community to be alert to the risk of mycoplasma pneumoniae spreading to Taiwan amid a surge in respiratory infection clusters of pneumonia among children in northern China. 

Mycoplasma pneumoniae is an atypical bacterium causing upper respiratory infections and community-acquired pneumonia. China has reported a 2.5-fold increase in influenza-like cases in its northern provinces and warned that mycoplasma pneumoniae is becoming antibiotic-resistant. The increase began in May and coincided with other respiratory pathogens like respiratory syncytial virus. The situation requires ongoing observation until spring, the CDC said.  

Mycoplasma pneumoniae mainly affects children, although people at all ages are at risk of infection. The CDC reminded doctors to remain vigilant and rigorously inquire and record patients’ travel history, occupation, contact history, and cluster history or other related information to prevent cluster infections in hospitals. 

Heavy Metal Rules Add Nuts, Chocolate                       

Amended food safety rules drafted by the Ministry of Health and Welfare (MOHW) would regulate heavy metal content in chocolates, seeds, and nuts for the first time, alongside adjusting the levels considered safe for animal offal, baby food, and other food products. Limits would be placed on levels of cadmium, a heavy metal commonly found in nuts and seeds, in chocolate products, as well as in beef and lamb offal, pork, and poultry. Under the revised rules, the allowable lead content in powdered baby food would also be lowered.   

The Taiwan Food and Drug Administration (TFDA) said the changes would offer greater protection to infants and young children, align with international standards, and be based on scientific research conducted in Taiwan and abroad, while considering the comparatively high consumption of offal in Taiwan. If approved, the amendments would go into effect in July 2024. 

First Alcoholism Center Established

The MOHW has inaugurated the first Taiwan Alcohol Abstinence and Addiction Prevention Center to provide consultation, screening, and referral services to those seeking help. As part of a broader effort to prevent alcoholism, safe consumption standards will be established, and subsidies will be offered to individuals who want to quit drinking. The Center will also focus on enhancing health literacy and conducting local research to inform policymakers, as well as providing in-person, phone, and online consultations.  

A budget of NT$40 million (US$1.3 million) has been allocated for alcohol addiction prevention, with plans for annual increases. Excessive drinking in Taiwan results in approximately 4,500 deaths annually.  

Urban Renewal Changes Passed                   

Lawmakers have passed an amendment to the Statute for Expediting Reconstruction of Urban Unsafe and Old Buildings. The amendment is expected to help streamline the process of demolishing dilapidated urban structures and facilitating their reconstruction. Under the amendment, public property will automatically be included in urban housing reconstruction projects unless alternative plans exist for their reasonable use.  

Minister of the Interior Lin Yu-chang emphasized that the change would eliminate the time-consuming need for unanimous consent from all property owners involved in public-private projects. The government can now include public properties through partnerships, auctions, or special sales to promote urban renewal initiatives.