The spillover effects of China’s overcapacity are spreading across the board, attracting global attention. Recently, heavyweight American politicians Yellen and Blinken have visited China one after another, which has aroused speculation from the outside world. Yellen mentioned the problem of China’s overcapacity spilling over to the world, while Blinken may put pressure on Swift over China’s aid to Russia, indicating that the U.S.-China struggle has entered a new stage. Xie Jinhe, chairman of Caixin Media, posted on Facebook: Will the spillover of China’s overcapacity have an impact on Taiwan? He highlighted two signals in particular that deserve attention.
The spillover effect of China’s overcapacity has affected South Korea. LG Chem and Lotte Chemical have successively announced the closure of production lines. South Korea’s petrochemical industry is also facing competitive pressure as China’s production capacity is fully activated. This phenomenon has attracted attention in Taiwan. First of all, in the export orders announced in March, products such as information communications and semiconductors grew, but industries such as rubber, plastics, basic metals, chemicals, and machinery continued to decline, indicating that China has overcapacity. impact on Taiwan’s economy.
Another even more shocking signal is that in the fourth quarter of last year, except for Taiwan Chemical, which made a small profit of 118 million yuan, almost all petrochemical companies suffered losses. For example, Formosa Plastics lost 2.901 billion yuan, Taiwan Polymer lost 367 million yuan, Huaxia Loss of 38.52 million, Asia Ju’s loss of 151 million, Delta’s loss of 113 million, Taiben’s loss of 163 million, Guoqiao’s loss of 410 million, Liancheng’s loss of 191 million, etc. This phenomenon of comprehensive losses in the entire industry has been extremely common in Taiwan for decades. rare. Some leading companies in Taiwan, such as Taiwan Cement and Formosa Plastics, are also working hard to transform, but the benefits have not yet been demonstrated.
Xie Jinhe pointed out that the other side likes to use ECFA to threaten Taiwan, but these industries are actually victims of the spillover effects of China’s overcapacity. The more Taiwan relies on ECFA’s industries, the more severe the impact will be. Therefore, if the impact of South Korea’s petrochemical industry is transmitted to Taiwan, it will be shocking news.
