The number of companies in Taiwan saying they are experiencing business disruptions due to rising tensions between Taipei and Beijing has nearly doubled, according to the American Chamber of Commerce in Taiwan.
An annual survey, which surveyed 214 member firms in Taiwan, showed that the number of companies reporting a “significant disruption” increased from 17% to 33% between August and December 2022, the chamber said tuesday.
Last August, then-US House Speaker Nancy Pelosi visited Taipei, and China stepped up military exercises in response. China’s ruling Communist Party has increasingly asserted its territorial claims to democratic Taiwan, a self-governing island, even though it has never controlled it.
The business disruptions were caused by major concern from world headquarters, rising shipping, insurance or financial costs, as well as staff anxiety, the chamber explained.
Nearly half of the companies surveyed by the chamber said they are developing contingency plans in response to increased tension.
Last month, China sent 28 fighter jets across the midline of the Taiwan Strait as Beijing held its first large-scale military exercises around the island this year, according to Taiwan’s Defense Ministry.
“For companies in Taiwan, cross-strait relations are very important,” Kristie Hsu, director of Taiwan’s Chung-Hua Economic Research Institution, told CNN.
He added that concerns include potential supply chain disruptions or unilateral moves that could undermine trade.
The chamber reported that two-thirds of its members surveyed said that political uncertainty was the main factor deterring them from further investment in Taiwan.
“It is an unstable environment, and we would expect companies here on the ground to look ahead prudently,” AmCham Taiwan president Andrew Wylegala told reporters, adding that none of its members had left Taiwan due to concerns about the rise in geopolitical tensions.
To reduce the likelihood of future disruptions, 28% of companies surveyed by the chamber said they are working to realign supply chains, while 18% said they are expanding into additional locations outside of Taiwan.
–CNN’s Brad Lendon contributed to this report