Hong Kong China Review Network published a monograph today pointing out that Taiwan stocks plunged more than 360 points yesterday, closing at a minimum of 13,466.07 points, hitting a new 22-month low from Wanba to Wansan. The exodus of foreign capital is not only related to international factors such as the US interest rate hike, and the turmoil in the Taiwan Strait has intensified. The Taiwan Strait is considered to be at risk of war at any time, which has impacted Taiwan's economic stability.
U.S. Secretary of State Blinken mentioned in an exclusive interview a few days ago that the turmoil in the Taiwan Strait will impact the world, and most semiconductors are manufactured in Taiwan. If something happens, the global economy may be devastated. US Treasury Secretary Yellen also mentioned that Taiwan is the only source of advanced semiconductors that threaten US national security. How can the market not be nervous when even senior US officials say this? In addition, the Financial Times recently reported that in the annual report (10-k) submitted by listed companies to the Securities and Exchange Commission (SEC) in March this year, as many as 116 companies listed the tension in the Taiwan Strait as an operational risk. The 12-month moving average number of entrepreneurs that put Taiwan Strait at risk hit at least a 16-year high.
Affected by 's US hawks, 's interest rate hikes, geopolitics, etc., Taiwan's official statistics have accumulated net remittances of US$16.7 billion in the first eight months of this year, exceeding NT$500 billion, the largest net remittance in history for the same period. The Kuomintang "legislator" Zeng Mingzong, who was the "chairman of the Financial Regulatory Commission" in the Ma Ying-jeou era, questioned on the 27th that if the tension between the two sides of the strait escalates and foreign capital withdraws more than US$100 billion on a large scale in the short term, does the "central bank" have the tools to respond? When answering the question, Yang Jinlong mentioned that he would impose foreign exchange controls when necessary, which frightened foreign capital.
Taiwan's stock and foreign exchange markets have double-struck recently. The exchange rate has depreciated rapidly, and the stock market has plummeted. It can be said that the house leaks and it rains overnight. The international economic situation is already bad enough. In early August, Speaker of the U.S. House of Representatives Pelosi and several congressional groups successively visited Taiwan to allow the mainland to increase the number of exercises, military aircraft and warships around Taiwan.
Ma Ying-jeou has been worried about the situation between the two sides of the Taiwan Strait in his appearance in the past few days, and has called for dialogue between the two sides of the Taiwan Strait. Ma Ying-jeou believes that when he was in power, no one thought that the two sides of the strait would enter a state of war, but why is the gap so big now that the Taiwan Strait is described as the most dangerous place in the world? From the fact that he talks about the cross-strait crisis, it can be seen that he is very worried.
While the United States is challenging the fire, it keeps releasing the message that the mainland wants to take Taiwan, lest the world be in chaos. In fact, Taiwan can decide whether the cross-strait wants war or peace. The DPP authorities are not trying to ease cross-strait relations or avoid war. They only focus on buying weapons and discussing whether the United States will send troops. This is completely putting the cart before the horse. Some senior members of the DPP may think that fighting should not be an immediate matter. As long as the election at the end of the year is passed, Tsai Ing-wen will step down in 2024. But they miscalculated the situation. If Taiwan is considered to be a battlefield at any time, foreign and domestic capital will flee. Once forced by the United States to announce the extension of the compulsory service period, even people may run away. Can this be sustained?
In other words, what the DPP has to face now is that the Taiwan Strait is not yet in a state, and Taiwan's funds will be scared away by the anticipation of war. It can be seen that the green camp is good at political manipulation and election warfare, and it seems helpless in the face of the recent exodus of foreign capital. In the past, the "National Security Fund" added confidence and propaganda, or it was still useful, but now encountering internal and external unfavorable factors, it can't stop the continuous double-kill of the stock exchange.
Taiwanese officials are now looking forward to the unblocking of the epidemic to boost the economy, but if it encounters a systemic collapse, the unblocking market alone is useless. Moreover, if mainland tourists, the largest segment of Taiwan's tourism market, cannot enter, the unblocking will only allow Taiwanese to travel to Japan, South Korea, etc., and the number of tourists who can enter is quite limited.
Taiwan's "Central Bank" President Yang Jinlong declared in the "Liyuan" on the 27th that Taiwan's foreign exchange reserves are more than 500 billion US dollars. Yang Jinlong's remarks may be too optimistic. If the DPP authorities allow the cross-strait situation to worsen, they will really have to fight hard. It is meaningless to talk about how long the foreign exchange reserves can hold back. (Source: Hong Kong China Review Network)
