|
|
Change Your Life! |
Tensions with China underline computer biz's dependence on Taiwan |
|
News
|
May 9, 2000
TAIPEI, MAY 8 (AP) - Chinese saber-rattling over Taiwan's presidential election has quieted, calming anxieties not just in East Asia, but in corporate board rooms around the world.
In the increasingly intertwined world economy, any kind of conflict between the two rivals that disrupted life on this island could be a disaster for electronics companies around the globe.
Taiwan makes half the world's notebook computers and is a leading producer of key parts for most computers, including memory chips, graphic cards and motherboards. Many of the same parts are essential for cell phones, video games and other household electronic gadgets.
In computer chips alone, Taiwanese firms produced about 10 percent of the world's supply last year, output worth about dlrs 13 billion.
"If a war should break out in the Taiwan Strait, its impact on the world economy would be no less serious than that of the Gulf War," said Huang Li, vice president of Champion Consulting Co. in Taipei.
After Iraq invaded Kuwait in August 1990, disruptions in world oil supplies pushed prices up sharply, hitting consumers hard and throwing stock markets into a tailspin.
The world has already witnessed what happens when Taiwan's chipmakers are forced to take just a few days off. Last September, an earthquake blacked out Taiwanese high-tech firms for a couple of days and slowed production for a little over a week.
IBM and Dell, the largest U.S. seller of personal computers, both blamed the quake for smaller than expected profits in the third quarter. Japan's Nintendo said the chip shortage cut its supply of Game Boy video-game players by 1 million units before the crucial Christmas season.
China and Taiwan, which split 50 years ago at the end of the civil war won by the communist forces of Mao Tse-tung, have one of the world's most potentially explosive relationships.
China has repeatedly threatened to attack Taiwan if the prosperous, democratic island seeks formal independence. Most Taiwanese oppose reunification with the mainland as long as the communists are in power, and more and more young islanders feel no ties to China at all.
The communist regime in Beijing is especially worried now that the Taiwanese have elected Chen Shui-bian as president, a man China's leaders clearly dislike because he once was a vocal supporter of independence.
Although Beijing has said it is willing to monitor Chen, who takes office May 20, his victory has analysts speculating about what China might do.
Experts disagree over whether China's military is strong enough to mount an invasion across the 80-mile (130-kilometer)-wide Taiwan Strait, given the island's more advanced U.S. weapons.
But there are things China could do short of all-out war to disrupt Taiwan's life. Experts say the Chinese could try to coerce the islanders by firing a few ballistic missiles at unpopulated mountain regions or by enforcing a naval blockade for a few days.
Either of those options could disrupt the flow of electronic components from Taiwan's factories, and even such low-level conflict would likely scare away foreign investment.
Unsettled social conditions also would likely cut into production. The thousands of high-tech workers who have recently returned to Taiwan with degrees from American universities might leave for safer environs, such as California's Silicon Valley.
But China also has to weigh the damage to its own economy. Wang Tse-po, an executive with the semiofficial Institute for Information Industry, said conflict with Taiwan would seriously harm China's economic reforms.
China's effort to build up its computer industry is heavily dependent on help from Taiwan, which although it bans direct contacts with the mainland allows indirect investment and trade. Chinese computer makers get 60 percent of their parts and components either from Taiwan or from factories the Taiwanese have built on the Chinese mainland, Wang said.
In the first quarter of this year, Taiwanese investment in computer and other high-tech projects in China surged fourfold to dlrs 320 million, the Taiwanese government reported recently.
Robert Tsao, chairman of United Microelectronics Corp., Taiwan's No. 2 chipmaker, says Taiwan and China should concentrate on increasing trade and high-tech cooperation so they can become part of the "borderless world," like the European Union.
"If we create political turmoil and military conflict rather than develop our economies, people on both sides of the Taiwan Strait could return to the poverty of the 19th century," Tsao warned in an open letter to Taiwanese newspapers.
|