Latest news with #MeaghanTobin
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Business Standard
6 days ago
- Business
- Business Standard
Can Taiwan disconnect economy from, China, its biggest trading partner?
By Meaghan Tobin, Amy Chang Chien and Xinyun Wu China has long been Taiwan's most important trading partner, the main buyer of its exports and the place where many of its companies make their products. China is also Taiwan's greatest threat and claims that the island democracy is part of its territory. Now, Taiwan's ruling political party says it wants to do more to dismantle the commercial ties that for decades have propelled Taiwan's economic growth. President Lai Ching-te is calling for companies that make semiconductors — Taiwan's main industry — to stop buying from and selling to China. Mr. Lai has said Taiwanese firms, which make the majority of the world's advanced computer chips, should instead embrace a supply chain that involves only companies from democratic countries. Taiwan's ruling party wants to be seen in Washington as a reliable friend of the United States, 'even if that means paying a short-term economic cost,' said Kharis Templeman, a research fellow at the Hoover Institution, a think tank at Stanford University. But Taiwan could pay a high cost for shifting its economy away from China. For decades, almost all foreign investment by Taiwanese companies went to China. Taiwan's biggest companies, including the Taiwan Semiconductor Manufacturing Company, or TSMC, and the electronics giant Foxconn, grew on the strength of manufacturing investments in China and sales to Chinese companies. Foxconn, which makes devices for Apple and Nvidia, produces a significant share of the world's consumer electronics at its factories in central China, where it has benefited from years of government-backed infrastructure investment. The company's founder, Terry Gou, ran for president in Taiwan in 2024. Taiwan's richest person, Barry Lam, built his fortune making laptops in China with his company, Quanta Computer. The Taiwanese food and beverage conglomerate Want Want depends on China for the majority of its sales. Its founder, Tsai Eng-meng, is a vocal supporter of China's claims on Taiwan and runs pro-Beijing television stations and YouTube channels. The close ties between the two economies have been seen in Taiwan as a deterrent against China's aggression, and a way for China to exert its influence over the island. The coupling cuts both ways. Over the last decade, some Taiwanese firms have begun to reconsider their dependence on China. In 2014, when Taiwan's leaders proposed closer economic ties to China, thousands of Taiwanese people protested over fears of becoming too dependent on Beijing. The plan was ultimately shelved. The trade tensions and Covid-19 pandemic made Taiwanese businesses pull back further. Last year, just over 7 percent of Taiwan's new foreign investment went to China, down from over 80 percent in 2010. Still, analysts say completely decoupling the two economies would be difficult. China remains the largest buyer of Taiwan's exports, especially semiconductors. At the same time, Taiwan depends on political and military support from the United States to help resist pressure from Beijing. Mr. Trump has demanded that Taiwan drastically raise its own military spending and accused Taiwan of stealing the lead in semiconductor manufacturing from the United States. Officials in Taiwan have committed to a slight increase in military spending, and TSMC said it would more than double its investments in the United States to $165 billion. The sale of tech equipment to China is likely to be a continuing source of friction, and negotiation, for Taiwan in its dealings with the Trump administration. Last year, a chip made by TSMC ended up in a Huawei device despite U.S. export controls, angering officials in Washington. Taiwan's addition of Huawei and SMIC to its restricted trade list is a step toward cutting off the business that has continued to flow to China. Despite the pressures pushing Taiwan further away, there are compelling forces drawing companies to China. Howard Yuan, 36, is a manager at Superb International in Shanghai, a garment manufacturer his family founded in Taiwan and expanded to China in the 1980s. He said it would be hard to replace China's suppliers. And Ruby Chen, 32, said China was an easier place to start a business than Taiwan. For the past three years, she has run a wellness company focused on traditional Chinese medicine in Shandong, China.
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Business Standard
6 days ago
- Business
- Business Standard
Coder 'village' at the heart of China's artificial intelligence boom
Meaghan Tobin It was a sunny Saturday afternoon, and dozens of people sat in the grass around a backyard stage where aspiring founders of tech start-ups talked about their ideas. People in the crowd slouched over laptops, vaping and drinking strawberry Frappuccinos. A drone buzzed overhead. Inside the house, investors took pitches in the kitchen. It looked like Silicon Valley, but it was Liangzhu, a quiet suburb of the southern Chinese city of Hangzhou, which is a hot spot for entrepreneurs and tech talent lured by low rents and proximity to tech companies like Alibaba and DeepSeek. 'People come here to explore their own possibilities,' said Felix Tao, 36, a former Facebook and Alibaba employee who hosted the event. Virtually all of those possibilities involve artificial intelligence. As China faces off with the United States over tech primacy, Hangzhou has become the center of China's AI frenzy. A decade ago, the provincial and local governments started offering subsidies and tax breaks to new companies in Hangzhou, a policy that has helped incubate hundreds of startups. On weekends, people fly in from Beijing, Shanghai and Shenzhen to hire programmers. Lately, many of them have ended up in Tao's backyard. He helped found an AI research lab at Alibaba before leaving to start his own company, Mindverse, in 2022. Now Tao's home is a hub for coders who have settled in Liangzhu, many in their 20s and 30s. They call themselves 'villagers,' writing code in coffee shops during the day and gaming together at night, hoping to harness AI to create their own firms. Hangzhou has already birthed tech powerhouses, not only Alibaba and DeepSeek but also NetEase and Hikvision. In January, DeepSeek shook the tech world when it released an AI system that it said it had made for a small fraction of the cost that Silicon Valley companies had spent on their own. Since then, systems made by DeepSeek and Alibaba have ranked among the top-performing open source AI models in the world, meaning they are available for anyone to build on. Graduates from Hangzhou's Zhejiang University, where DeepSeek's founder studied, have become sought-after employees at Chinese tech companies. Chinese media closely followed the poaching of a core member of DeepSeek's team by the electronics company Xiaomi. In Liangzhu, many engineers said they were killing time until they could create their own startups, waiting out noncompete agreements they had signed at bigger companies like ByteDance. DeepSeek is one of six AI and robotics startups from the city that Chinese media calls the 'six tigers of Hangzhou'. Last year, one of the six, Game Science, released China's first big-budget video game to become a global hit, Black Myth: Wukong. Another firm, Unitree, grabbed public attention in January when its robots danced onstage during the Chinese state broadcaster's televised annual spring gala. Liangzhu villagers have been hosting film nights. They had recently gathered to watch 'The Matrix.' Afterward, they decided the movie should be required viewing, Lin said.
New York Times
15-05-2025
- Business
- New York Times
The End of Fast Fashion?
For years, American consumers have been able to spend next to nothing on the latest fashion trends, thanks in large part to Chinese clothing companies like Shein and Temu. These businesses have long used a loophole to send millions of packages a day into the U.S. from China tax-free. Now, President Trump is closing that loophole, even as he de-escalates his larger trade war with China, and prices are going up. Meaghan Tobin, who covers business and technology in Asia, discusses whether this might be the end for fast fashion.
New York Times
05-05-2025
- Business
- New York Times
Hit by Trade War, China's Garment Industry Refuses to Stop Hustling
Visuals by Qilai Shen Text by Meaghan Tobin China makes nearly one in every three garments sold around the world. Much of it comes from Guangzhou, which has long been a hub of China's trade with the rest of the world. The city, in the southeast, is home to thousands of small factories where people sew seams and affix zippers as quickly as fashion trends change. But as President Trump has ramped up tariffs targeting China, workers in the bustling garment industry here are growing worried about whether people around the world will keep buying. Online marketplaces like Amazon, Shein and Temu helped American shoppers get hooked on goods from Guangzhou at rock-bottom platforms became popular at the same time that the Chinese government was pushing small businesses to find buyers overseas. Until April, business was good. Then the world's two-largest economies began forcing each other apart with tariffs. There's a reason Guangzhou is the world's hub for cheap some neighborhoods, open-air workshops sit across the street from one another. One cuts the fabric out, another sews the seams and a third adds zippers and finishing. A fourth business is responsible for picking up batches of orders that are collected at logistics centers. Feng Chaoyun has run a clothing factory with his wife for seven years. They used to employ 25 people sewing dresses for Shein, which ordered about 40,000 each orders dropped to just 20,000 in April. Lately, Mr. Feng said, they can afford to pay only 10 workers. 'With the order volume down, we can't support so many people,' he said. For workshops here, many of which operate around the clock, profit margins are already razor-thin. Many don't have the safety net to survive this period of people told us they had watched neighboring businesses close down in the past few weeks as orders from foreign buyers dropped significantly. Economists have warned that millions of people could lose their jobs because of the tariffs. Factories hire workers each day at informal markets that convene on particular bring samples of the products they are looking for people to assemble — crisp white T-shirts, delicate linen skirts. Workers decide if they want to spend the day pressing seams or stitching elastic waistbands. Liu Miao parked his motorbike on the sidewalk with a dress sample draped over the handlebars. For the past five years, he sold clothes to wholesale buyers in the United States on Amazon. But they stopped buying when tariffs kicked in. This month, he stopped selling on Amazon. 'We can't make it work even if we hire fewer people,' Mr. Liu said. Workers are convinced that people all over the world still need to buy the T-shirts, dresses and crop tops made in Guangzhou's are moving to other provinces or to other countries, where they hoped to pay lower wages and avoid tariffs. Others were looking for new buyers in Europe and Southeast Asia. 'People in other countries still need to wear clothes,' said Zhang Yikui, who works at a factory that sells clothing on Shein and Amazon. 'Little by little, China will keep going.' Meaghan Tobin covers business and tech in Asia with a focus on China. Qilai Shen is a photographer based in Shanghai. Siyi Zhao contributed research.
