Taiwan will widen US-China schism

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    By Robyn Mak

    HONG KONG- Keep a close eye on Taiwan in 2020. Its significance is set to grow amid shifting supply chains.

    Anti-Beijing sentiment also has been gaining traction in the United States.

    Both dynamics herald deeper ties between Taipei and Washington, bolstering the case for a controversial bilateral trade deal.

    The $560 billion economy is an unlikely beneficiary from US-China tension.

    While other Asian export powerhouses grapple with slowing demand, Taiwan recently nudged up its GDP growth forecast for 2020, to 2.7 percent.

    Rising domestic investment should help, boosted by local manufacturers moving operations back home from mainland China.

    Moreover, American companies are buying more from Taiwan. In the first half of 2019, for example, US tariffs diverted over $4 billion of office machinery and communications equipment orders to the island, according to a UN report.

    The likes of Microsoft and Alphabet’s Google are among those stepping up investments there.

    Against this backdrop is growing American antagonism towards the People’s Republic, which considers self-governed Taiwan a renegade province.

    President Donald Trump signed a veto-proof bill effectively supporting anti-government protesters in Hong Kong.

    Soon after, the US House of Representatives roundly passed a bill that condemns the crackdown on Chinese Muslims in Xinjiang.

    Taiwan is next on the legislative agenda.

    The Taiwan Allies International Protection and Enhancement Initiative Act calls for the United States to reduce engagement with countries whose actions have undermined Taiwan.

    Under President Tsai Ing-wen, who faces an election in January, and her independence-leaning Democratic Progressive Party, eight countries have broken diplomatic relations with Taiwan in favor of Beijing.

    The US proposal also calls for bilateral trade talks.

    That will provoke Chinese President Xi Jinping and could even derail already-fragile US-China negotiations. But there is a strategic rationale for a trade agreement with Taiwan. – Reuters