During the April 7-12 visit to China led by KMT’s Chairperson, Cheng Li-wen, almost no major figures from the Taiwanese business community accompanied the delegation. Only a small number of party officials were present, making the scene appear particularly subdued. This is not just a political spectacle—it is also a real reflection of China’s ongoing economic downturn. Back then, cross-strait economic and trade relations were still in a “honeymoon period,” and Taiwanese entrepreneurs rushed to seize the opportunity. Today, however, the global situation has reversed: most prefer to quietly shift toward other markets rather than risk publicly taking a stance.
Looking back at the Lien–Hu meeting in 2005, China’s economy was booming, globalization was at its peak, and the world still held an open attitude toward Beijing. Major Taiwanese business leaders in electronics, finance, automotive, plastics, and shipping turned out in force, hoping to pave the way for cross-strait agreements, with remarkably generous prospects for mutual benefit. At the time, many believed that boarding China’s high-speed economic train would allow them to share in its dividends.
But by 2026, the situation has completely changed. The U.S.–China tech war and supply chain restructuring have made the “China +1” strategy a basic rule for business survival. According to statistics from Taiwan’s Department of Investment Review, investment from Taiwan into mainland China dropped sharply by 59 percent year-on-year in 2025, while the number of approved cases also fell by more than 40 percent. The share of Taiwanese investment going to China has plunged from 83.8 percent in 2010 to just 2.7 percent in the first quarter of 2025. In 2024, 70 percent of Taiwanese businesses operating in China saw their profits decline—an astonishing shift that many people are still unaware of.
Traditional industries have been hit the hardest. Sectors such as cement, steel, petrochemicals, food, and chemicals—once highly profitable thanks to mainland China’s domestic demand—are now facing intense competition from Chinese local brands rapidly expanding with state subsidies. Taiwanese companies are left struggling to survive in brutal price wars. In 2025, Formosa Plastics Group suffered losses due to excess petrochemical capacity in China and low-price dumping, with its Taiwan headquarters reporting post-tax losses exceeding NT$10 billion and a loss per share of NT$1.58—significantly worse than the previous year. Nan Ya Plastics also swung from profit to loss, recording nearly NT$5.5 billion in net losses for the year. This is not an isolated case but a widespread pain point across the traditional manufacturing sector. China’s overcapacity has led to low-priced exports that not only impact Asian markets but also cut deeply into Taiwanese manufacturers’ profit margins.
Even less widely known is that many Taiwanese businesses are deeply entangled in China’s real estate crisis. Following the debt crises of developers such as Evergrande and Country Garden, many Taiwanese firms in construction and precision machinery—holding related bonds or directly investing in mainland real estate—have seen bad debts surge and asset values shrink dramatically. As global funds accelerate “de-China” strategies, the liquidity of China-related stocks has deteriorated. Even companies that remain profitable are trading at painfully low price-to-earnings ratios. The cement industry faces a similar situation: Taiwan’s domestic market share has fallen below 70 percent for the first time, with large volumes of clinker imported from Vietnam, intensifying low-price competition and putting local producers under severe strain.
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This wave of crisis has also affected many small and medium-sized business owners and ordinary households in Taiwan, particularly their retirement funds and family investments. Many SME owners, once optimistic about China’s property market, invested their hard-earned retirement savings or spare funds into China-related stocks, bonds, or real estate through funds or direct channels. However, with Evergrande’s liquidation and Country Garden’s consecutive years of massive losses (reaching RMB 178.4 billion in 2023), these investments have sharply depreciated or turned into bad debts. Many small business owners who once expected to rely on these “China dividends” for a comfortable retirement now find their assets shrinking on paper, forcing them to dip into other savings to cover losses. There are also numerous cases of homemakers and salaried workers indirectly exposed through bank wealth management products, disrupting retirement plans and sharply increasing financial pressure. These hidden losses are far more reflective of the everyday realities faced by millions than the financial statements of large corporations.
The high-tech sector faces difficult choices as well. Semiconductor supply chain leaders such as TSMC are making massive investments in the United States. Its total investment in Arizona has already reached US$165 billion, with plans to build additional wafer fabs and advanced packaging facilities. Capital expenditure is expected to rise to between US$52 billion and US$56 billion in 2026. If it continues to focus heavily on China, it risks losing orders from clients like Apple and NVIDIA, while also facing potential obstacles such as “security reviews” or foreign exchange controls imposed by China. Taiwan’s exports to the United States accounted for 30.9 percent in 2025—surpassing the combined 26.6 percent going to China and Hong Kong for the first time in 26 years—indicating that its economic engine has already shifted.
Since 2023, China has broadened the interpretation of its anti-espionage law, and cases of Taiwanese corporate executives being barred from leaving the country at airports have become increasingly common. For example, an executive from Formosa Plastics Group was reportedly placed under “border control” upon entering Shanghai, taken in for questioning, and unable to return to Taiwan for 19 days. This kind of invisible pressure has left business leaders feeling constantly at risk. Many once believed that staying apolitical and focusing on business would ensure safety, but they now realize that without democratic institutions and the protection of international allies, assets can at any time become bargaining chips for Beijing—creating a situation where they “cannot leave, cannot stay, and cannot afford the losses.” As a result, some Taiwanese firms have begun discussing withdrawing Taiwanese personnel from China to reduce risk.
The impact is not limited to large corporations. Countless ordinary people across Taiwan are also affected. The retirement savings of small business owners, factory technicians, and homemakers have been indirectly hit. Small contract manufacturers that once relied on China for assembly and export are now forced to relocate production lines amid supply chain restructuring, with workers either moving along or changing careers. Employees in traditional retail and food processing industries see the mainland market becoming overcrowded, wages stagnating, and living pressures increasing. Some Taiwanese businesspeople have even lost their hard-earned money due to retroactive environmental fines or tax investigations in China. If traditional industries such as petrochemicals, steel, and cement continue to decline, the direct and indirect impact on employment could reach hundreds of thousands, affecting livelihoods across many sectors.
Businesspeople are pragmatic. Joining delegations to China was once about solving problems and seeking opportunities. But now the business community sees clearly that Taiwan’s economic engine has already changed fuel. The era of AI and global value chains represents the real path forward. High value-added industries such as semiconductors and precision machinery are becoming closely integrated with the United States, Japan, and Europe. Traditional industries, meanwhile, must upgrade and transform toward green, intelligent, and high-value production—rather than clinging to the old dividends that have already been exhausted.
This subdued visit precisely reflects how the Kuomintang is still relying on outdated thinking to search for momentum. The dividends of the “1992 Consensus” era have long been exhausted, while the new global landscape is now firmly shaped by civil society and the technology sector. If the party continues to depend solely on support from Beijing while ignoring mainstream public opinion and the needs of the business community, its future electoral prospects will likely become even more challenging. Persisting in drawing closer to Beijing will only accelerate its disconnection from Taiwanese society.
The people of Taiwan understand this best: the right path forward is to safeguard democracy and freedom, embrace global partnerships, and upgrade both traditional and high-tech industries together. What hardworking citizens need is a stable, secure environment with a clear future—not one where their efforts are tied to a single market marked by policy uncertainty and rising risks. Only by recognizing this can Taiwan move forward more steadily and farther, allowing the next generation to continue building their lives and prospering on this land.
It is hoped that voters will remember the Kuomintang’s unreliability in the year-end elections. It has gradually become something consigned to the ashes of history, unable to lead Taiwan in the right direction. Only by facing reality and choosing political forces that embrace the global value chain can the hard work and future of the people be protected.
(This article is exclusively authorized by Up Media for “Vision Times.” Please do not reproduce or plagiarize. Original link.)
(The article reflects solely the author’s personal views and opinions.)
By Jason Wu
