The novel coronavirus epidemic seems unstoppable, while plans to restart work across China after the Chinese New Year have been repeatedly delayed. According to Zhan Wen-nan, the director of Market Intelligence and Consulting Institute (MIC) of the Institute for Information Industry, if the shutdown continues into March or even April, the impact on China’s Red Supply Chain could be significant. Jim Chung, the deputy director of the Industrial Economics & Knowledge Center (IEK) of the Industrial Technology Research Institute (ITRI), considers that if the value chain of production throughout China is hit hard, it should reduce the pressure on Chinese factories to compete with Taiwan manufacturing, as well as the head-hunting of Taiwanese talent. Some Taiwanese factories might have then started to feel the effect of the transfer order, widening the industry gap.
　　Zhan, Wen-Nan has pointed out that international manufacturers, including Taiwanese businessmen, have begun to globalize their businesses due to the trade conflicts between the United States and China over the last two years. As such, the short-term impact of the Wuhan pneumonia epidemic on Taiwanese businesses won't be so significant. However, some basic component factories, whose PCB factories and therefore their upstream supply chain, such as metal parts and plastic materials, have long been supplied by local Chinese manufacturers, may suffer a chain-rupture effect if the impact of the epidemic persists into April.
　　As pinpointed by Jim Chung, if the epidemic situation affecting important industrial clusters in various parts of China cannot be alleviated, it will severely damage the local supply chain in China and even affect the long-term development of its industry, reducing the pressure of competition from the mainland factories towards Taiwanese factories and the head-hunting of Taiwanese talent. Surely, some Taiwanese manufacturing plants can lead the way and widen the gap. Nonetheless, if the economy in China declines due to regressing demands, our electronic products that account for a higher proportion of exports to China and Hong Kong, such as semiconductors, printed circuit boards, consumer electronics components, etc., may be negatively affected.(News source: Liberty Times)