Taiwan’s foreign firms weigh future amid China risk, COVID curbs | Business and

Taipei, Taiwan – As the Chinese military held unprecedented live-fire drills encircling Taiwan during the past two weeks, Taiwanese for the most part shrugged.

On August 6, at the height of the exercises, revellers on Dongyin – an island controlled by Taiwan in the Matsu archipelago just 50km (30 miles) from China’s Fujian Province – danced the night away.

Lii Wen, the head of Taiwan’s ruling Democratic Progressive Party (DPP) chapter in Matsu, quipped that “the EDM bubble-bath party rages on” amid “the 4th Taiwan Strait Crisis”.

For many multinational firms, which are vital to the health of Taiwan’s economy, the heightened tensions may be harder to ignore.

Although it remains to be seen if China’s increased military activity will adversely affect Taiwan’s foreign investment, some foreign firms operating on the island have already begun exploring the possibility of moving elsewhere.

Several foreign business executives that spoke to Al Jazeera on condition of anonymity said the recent tensions around the democratically-ruled island that Beijing claims as its territory had prompted them to consider relocating.

One executive, who has been based in Taiwan for more than a decade with an international consumer goods company, said that the scale of China’s live-fire drills served as a “wake-up call”.

“In the past, when China used to threaten Taiwan, I was dismissive because the threats were all verbal. This time, it looks more like the real thing,” he told Al Jazeera.

Key investors in the company feel the same way, the executive said, and have asked him to explore the possibility of setting up new company operations – both a manufacturing facility and office – in Thailand that would become the firm’s regional headquarters. The executive said he is considering relocating there with his family next year.

The investors “don’t want to wait around for the situation to deteriorate any further” to the point where it poses a “serious risk for company personnel and supply chains,” he said.

An executive at a Fortune 500 company based in Taiwan for several years said that he is exploring relocation to Singapore since he lacks confidence that Taiwan can adequately address the heightened military threat from China.

“The biggest concern for me is the security one, and that ties into the theme of unresponsive business-as-usual, sclerotic government and military,” he told Al Jazeera. “If what happened last week didn’t wake them up, I don’t know what will.”
The executive added: “It’s classic frog in the boiling pot. They don’t realise how hot the water is.”

Their concerns would appear to be widely shared among the island’s foreign business community.

In a survey released by the American Chamber of Commerce in Taiwan on Friday, 43 percent of respondents said they were either in the process of revising or planning to revise contingency plans for dealing with a serious crisis on the island.

Of the 126 participants in the survey, which was carried…