Tensions between Beijing and Washington are significant. As a global factory for chips and semiconductors, Taiwan is a more than major issue.
“The impact of a war in Taiwan would be much more violent on the economic level than the war in Ukraine, warns Bernard Keppenne, chief economist at the CBC bank. This would be the worst scenario that we can envisage today. Taiwan and China account for almost 85% of the entire semiconductor market. If China invades Taiwan, we will retaliate against it, and the whole economy will shut down because that nothing can work without semiconductors.”
“The impact of a war in Taiwan would be much more violent on the economic level than the war in Ukraine, warns Bernard Keppenne, chief economist at the CBC bank. This would be the worst scenario that we can envisage today. Taiwan and China account for almost 85% of the entire semiconductor market. If China invades Taiwan, we will retaliate against it, and the whole economy will shut down because that nothing can work without semiconductors.” Following the visit of the American Nancy Pelosi, speaker of the House of Representatives, the Chinese military maneuvers around the island – which Beijing considers to be one of its provinces – have greatly increased tensions with the United States. At the risk of generating a security and economic situation “unimaginable, a cataclysm”, considers Bernard Keppenne. “However, the question is no longer whether there will be a Chinese invasion of Taiwan but ‘when’. The Chinese ambassador to France made very strong remarks when speaking of the need for a ‘ re-education, after the invasion’. It’s very violent. Everything is said, these are not words that are held in the air, it’s very measured.” Together, Bernard Keppenne and his colleague Koen De Leus, chief economist at BNP Paribas Fortis, note that the United States and Europe are preparing for this eventuality and are investing tens of billions in the construction of semi- drivers. But it will take, at least, four to five years. “In reality, this crisis will further accelerate the deglobalization of the world and the growing distance between China and the United States”, regrets Koen De Leus. “When you polarize blocks, you have to continue to do business within these blocks, continues Michel Kempeneers, head of international relations at the Walloon Export Agency (Awex). Inevitably, when you deglobalise, it costs in more expensive and that makes costs explode, whether for products, transport or logistics. That is my main fear. For Belgian SMEs and companies that are highly dependent on international trade, this is a real concern. It should be remembered that 70% of the Belgian economy depends on foreign countries.” Responsible for relations between Wallonia and Asia for 10 years, Michel Kempeneers believes that we too often lack “subtlety” in these commercial links. “The last 20 years have seen the emergence of Asian countries imbued with Confucianism, Buddhism and another way of seeing the world. And too often the Western world has come with its own vision of things.” Conclusion: “My point of view, which is not necessarily shared by everyone, is that little Wallonia really has an interest in remaining open to the world and listening to its foreign partners, whether they are American, Japanese or Chinese, it doesn’t matter. Because it’s vital for us.”