On March 11 and in the days that followed, people around the world were horrified by the images of Japan’s devasting 9.0 earthquake and tsunami that washed entire villages from the map. With so many commonalities between Taiwan and Japan, the people of Taiwan were deeply moved to help their friend and neighbor.
Taiwan is also highly prone to earthquakes, with more than 1,000 felt every year. An especially powerful one hit the island on September 21, 1999, killing more than 2,000 people, so the people of Taiwan are especially sympathic to Japan’s plight.
Since the March 11 earthquake in Japan, Taiwan’s Foreign Ministry has sent 400 tons of disaster relief supplies (blankets, quilts and mineral water) and food donated by Taiwanese citizens to Japan. It is the largest donation received from a foreign country thus far, according to Taiwan’s Central News Agency. Quickly following the earthquake, Taiwan’s Foreign Ministry announced a donation of NT$100 million (US$3.3 million) in disaster relief to Japan. Taiwan’s entertainment circle also mobilized to hold a fundraising party on March 18 to raise NT$750 million (US$25 million). Japan’s Mainichi Daily News reported that donations from Taiwan have reached 6.4 billion Japanese Yen (US$8 million), by far the largest in Asia.
From Japanmania to empathy
In many regards, Taiwanese teens today are enamored by Japanese popular culture (including TV, movie stars, songs, costumes and comics). It is a phenomenon commonly known as “Japanmania” (harih). Journalist Chao Hsin-ping wrote in her blog, “Taiwanese and Japanese people share many customs and some Chinese characters in common. I think that is why we feel particularly close…I have been to over thirty countries, visiting more magnificent natural beauty, more ancient sites and historical monuments, and more precious cultural arts in Europe and America, but in recent years, I have felt closer to Japan.”
Also, in contrast to Taiwan’s sensationalization of news, the Japanese people and press have earned a wealth of respect for their calm and self-restraint in the face of disaster wrote an editor for the United Daily News. The Taiwan-based China Times commented, “The Japanese people have developed the notion that they are not the only victims, facing the disaster with a peaceful mind. Everyone thinks this, so and the social order can be maintained. Everyone exercises self restraint so disaster relief can proceed step by step.”
In reading the newspapers in Taiwan, you can get a sense of the deep admiration Taiwanese people have for the Japanese. “Japan suffers a heavy loss from the earthquake, but the Japanese people accept the orderly arrangement by the government. Japanese media broadcast the correct messages in a calm way, without exaggeration of the tragedy, or irrational criticism. This is no doubt a good lesson for Taiwan to learn,” expressed another Taiwanese commentator to the Central News Agency.
Taiwan and Japan are important trading partners. In 2010, total bilateral trade between the two reached a record high of US$69.9 billion. Taiwan imports its greatest volume of products from Japan, and Japan is also the largest source of Taiwan’s trade deficit. Taiwanese people are fond of Japanese products not only because of Taiwan’s colonial past under Japanese rule (1895-1945), but also because they share a similar geography and industrial structure. The Taiwanese are great admirers of Japan’s modernization and the maturity of its civil society.
Industrial chain effects
The United Daily News said that Taiwan’s semiconductor and flat panel display industries have close cooperative relations with Japanese companies like Elpida and Toshiba, so part of their orders will be transferred to Taiwan. Due to the earthquake, there has been a 20 percent price increase in flash memory and a 7 percent rise in DRAM spot prices, according to Taiwan-based Business Week. This will help Taiwan’s DRAM manufacturers rebound from the doldrums.
Before the quake, 70 to 80 percent of Apple’s flexible printed circuit boards (soft board) came from Japan, with only 20 percent from Taiwan. Post-quake, Apple is expected to accelerate the transfer of orders to Taiwan. And, if all the orders placed in Japan have to find other manufacturers, Taiwan’s FPC industry will benefit.
Japan’s decreased power capacity from the loss of its nuclear power plants will certainly hamper the country in getting back to business as usual. Also, much of Japan’s future energy needs might be concentrated on reconstruction. Taiwan is also in a position to benefit as Japan seeks to import large quantities of steel to shore up its buildings, pushing the price of steel higher and benefiting the Taiwan-based China Steel Corporation. However, the Business Week emphasized that if the industry recovery period in Japan’s disaster areas exceeds a month, global industrial supply chains will be in chaos, and nobody will benefit.
A tricky gamble
The Wealth Invest Weekly reported that so far it is still not very clear what the supply situation is for several key industrial materials after the quake, including bismaleimide-triazine (BT-Epoxy) resin, silicon wafer, ceramic powder, liquid crystal materials, photoresists, cutting fluid, and so forth. Even though Taiwanese companies currently maintain sufficient inventory and Japanese suppliers have said supply would return to normal very soon, it is well-known that there are dependent linkages in electronic components supply, each one closely interlocked with others. Once a link is broken, there is a risk of a “broken chain.” “Can you imagine if we overstocked components and parts, and pushed for over production now, but once the supply chain worry was found to be a false alarm, current rash orders would suddenly have turned into mass cancellations? How could you deal with a bunch of workers, the production capacity, and the big problem of excess inventory?” a concerned manufacturer told the Weekly.
The magazine used Hon Hai, the world’s largest contract manufacturer and parent company of Foxconn, as an example. Hon Hai has garnered the largest emergency order from Apple, which is a great vote of confidence from Apple. The number of Hon Ha workers has increased from over half a milliion to more than one million,with the number estimated to go as high as 1.2 million. Personnel management poses an extremely tough challenge for Hon Hai in the immediate future.
The Economic Daily News reported that Taiwan and Japan have established a vertical cooperation relationship in the industrial supply chain, especially in the areas of automobiles, machinery, electronics, and data communications. With a firm control on all the key industrial technologies, Japanese companies cooperate with their Taiwanese partners more in the form of technology transfer, technology licensing and as original equipment manufacturers (OEM). The earthquake revealed the risk of this current cooperative model. On the one hand, Taiwan should consider diversifying its source of technology and components, while on the other hand, it should speed up the pace of technological upgrades so it can improve its technical autonomy, thereby reducing its dependence on Japan.
Mixed support for nuclear power
As the weeks have passed with continuing dire news from the crippled Fukashima Daiichi nuclear complex, many Taiwanese politicians and TV pundits have asked difficult questions about their government’s preparedness to handle a nuclear meltdown in the face of Japan’s floundering efforts.
The Liberty Times reported that Taiwanese shipping magnate Chang Yung-fa, chairman of the Evergreen Group, donated 1 billion Japanese Yen (US$12.5 million) on March 23 to help Japan’s disaster relief, and also shared his anti-nuclear stance. He stressed that Taiwan is located in a seismic zone and should not have nuclear power plants. The best way to minimize the risk is to abolish all active plants, and to look for alternative energy sources, such as wind or hydro power.
Democratic Progressive Party (DPP) Chairwoman Tsai Ing-wen voiced her support for increasing the proportion of renewable energy, upping thermal electricity generation and prioritizing the construction of new natural gas powered plants. She believes in decommissioning nuclear power plants Nos. 1, 2, and 3 as scheduled and in not commercializing plant No. 4. Instead, she would like to see Taiwan be a nuclear-free zone after plant No. 3 is decommissioned in 2025. According to Taipower’s data from last year, Tsai said, the ratio of Taiwan’s dependence on nuclear power is only 12 percent. This means that in the absence of nuclear power, Taiwan may still be able to sustain its electricity demand.
In defending nuclear energy, Taipower Chairman Edward K. M. Chen estimates that Taiwan would not generate enough electricity by 2013 if nuclear energy is discarded, reported the China Times. To build plant No. 4 without commercial operations, as suggested by Tsai, would be a waste of US$20 billion over 25 years. It would exceed US$33.35 billion based on a 40–year calculation. Taipower’s Deputy General Manager Huang Hsien-chang said it is “unrealistic” to replace all nuclear power with renewable energy by 2025. Taiwan relies completely on imported natural gas, and the international gas deals have long been signed with long-term contracts. Huang said, “You won’t be able to buy it just because you have money on hand.” Currently 99 percent of Taiwan’s domestic energy depends on imports, while nuclear power accounts for 20 percent of Taiwan’s electricity.
If nuclear power were to be replaced with renewable energy sources, such as wind power for example, then Taiwan would have to build an estimated 12,000 wind turbines to be able to replace all the nuclear power plants. So far, Taipower has only built 162 wind turbines on the west coast of Taiwan, and “the sites fit to build wind turbines have already been covered,” said Huang.
Nuclear power in Taiwan
In order to ensure a stable supply of energy and greater electricity capacity to keep up with development, Taiwan’s government started to build it first nuclear power plant in 1970. Nuclear power plant No. 1 became operational in 1979. Currently there are four nuclear power plants in Taiwan. Three of them (Nos. 1 and 2 and the newly completed No. 4) are located on coastal areas 22 to 28 kilometers north of Taipei, while No. 3 is near the Kenting National Park in southern Taiwan.
In Taiwan, the anti-nuclear movement is more than 20 years old. The DPP, which has advocated a “nuclear-free homeland”, won political power for the first time in May 2000. Immediately after his inauguration, President Chen Shui-bian instructed the Executive Yuan to announce the termination of construction of nuclear power plant No. 4. But in January 2001, the Legislature Yuan, dominated by the Kuomintang (KMT), passed a resolution to request the Executive Yuan to immediately resume construction at plant No. 4. The dispute led to a constitutional interpretation by the Grand Justices, which declared the unilateral suspension of nuclear plant No. 4 “unconstitutional” and work resumed until money ran out.
This February, the Executive Yuan announced the resumption of construction on No. 4 after new funding was approved. The new plant is almost complete and estimated to be operational soon. According to the China Times, the government will underake a full physical examination on the construction of the new plant, pledging to safeguard the security of the plant and delay commercial operations if necessary.
In the face of the DPP’s concerns over nuclear safety, Premier Wu Den-yih said that the past suspension of construction on the plant has hurt Taiwan economically, resulting in international contractual disputes and lawsuits. The resumption of work has resulted in accumulated construction costs of US$6.7 billion, according to the United Evening News. This year another US$333.4 million was added to strengthen the plant’s safety. To halt, resume and maybe abolish nuclear power entirely has not only created huge economic losses, but has also been “a shock to the hard-earned social consensus on nuclear energy in recent years,” the premier said.