The Sankei Shimbun, one of Japan’s major national newspapers, recently published an in-depth report titled “Despite China’s Pressure, Taiwan’s Growth Rate Exceeds 7% — What Can Japan Learn from Taiwan’s Economic Decoupling?”The article examines how Taiwan has managed to sustain robust economic performance despite years of economic coercion from Beijing. According to the report, the Taiwanese government on November 28 significantly raised its GDP growth forecast for 2025 to 7.37%, driven largely by surging global demand for AI-related technologies and strong exports of electronic components and ICT equipment.
The report features insights from Dr. Jeremy Chih-Cheng Chang, CEO of the Research Institute for Democracy, Society and Emerging Technology (DSET), who emphasized that Taiwan’s experience in reducing economic dependence on China offers important lessons for Japan, which is currently facing similar pressure from Beijing.
According to The Sankei Shimbun, China has intensified economic coercion against Taiwan since the Democratic Progressive Party (DPP) took office in 2016 and refused to accept Beijing’s “One China Principle.” These measures—including suspending group tourism and banning agricultural imports—have affected specific industries such as agriculture and tourism. However, Taiwan’s overall economic performance has remained strong in contrast to China’s slowing growth, particularly as the global AI supply chain expands.
The article notes that Japanese Prime Minister Sanae Takaichi has recently faced Chinese pressure after referencing the possibility of a “Taiwan contingency” in the Diet, prompting renewed attention in Japan to the risks of over-dependence on the Chinese market. The Sankei Shimbun argues that Japan may find useful guidance in Taiwan’s strategic approach to “de-risking” in recent years.
Dr. Chang explained that following the launch of the New Southbound Policy, Taiwan has steadily reduced its economic exposure to China by strengthening trade and investment ties with Southeast Asia and encouraging Taiwanese firms to reshore manufacturing. The report cites data showing that Taiwan’s investment share in China fell to 7.5% in 2024—a dramatic drop from the peak of 58.5% a decade earlier.
Dr. Chang noted that although China has repeatedly employed trade bans and tourism suspensions as political tools, the overall economic impact on Taiwan has been limited. “In reality, it is China that depends heavily on Taiwan’s critical industries—not the other way around. That is why Beijing consistently targets agricultural or seafood products, while avoiding high-tech sectors,” he said.
He emphasized that Taiwan’s high-tech and ICT manufacturing sectors operate mainly on a global business-to-business model, serving international brand clients rather than relying on China’s domestic market. This reduces Taiwan’s vulnerability to Chinese retaliation and enables firms to adjust their supply chain footprints swiftly in response to geopolitical shifts.
The report also references proposals by international scholars to establish an “economic collective defense” mechanism to counter China’s increasingly frequent economic coercion. Victor Cha, a senior fellow at the Center for Strategic and International Studies (CSIS), previously testified before the U.S. Congress that G7 nations and like-minded partners could adopt collective retaliatory measures—modeled on NATO’s security framework—to create effective deterrence.
Dr. Chang commented that such a mechanism would face significant challenges without U.S. leadership. However, he added that if Japan were willing to play a more proactive role within Indo-Pacific cooperation frameworks, there remains real potential to build regional consensus.
