Asia-Pacific, China, International Trade & Finance Mostly Bluster: Why China Went Easy on Taiwan’s Economy

In retaliation for Speaker Nancy Pelosi’s visit to Taiwan last week, China conducted large-scale military exercises around the self-governing island democracy and suspended some trade between the sides. ...

Future bans may become more targeted to punish industries in counties that are D.P.P. strongholds, said Thomas J. Shattuck, an expert on Taiwan at the University of Pennsylvania’s Perry World House. There may also be less retaliation against counties run by the Kuomintang opposition party “in an attempt to put a finger on the scale for Taiwan’s local, and even national, elections,” he added. ...

Mr. Shattuck, the University of Pennsylvania analyst, said that Beijing would consider that industry “off limits” during future crises or bouts of economic retaliation for a simple reason: China needs Taiwanese semiconductors as much as other countries do.

“If Beijing truly believes that it can squeeze Taiwan into reunification via military pressure and short of an invasion, then a strong and healthy Taiwanese semiconductor industry would boost China’s economy in an eventual ‘unified’ P.R.C.,” he said, referring to the People’s Republic of China.

Read more in the New York Times >>