China’s military maneuvers around Taiwan are elevating diplomatic tensions with Beijing after the recent visit of US Congresswoman Nancy Pelosi. The developments put the trade of nearly 8,000 companies in the Alicante province at risk, with manufacturing and capital goods firms facing the greatest potential disruption as supply chains become strained.
China stands as the Valencian Community’s largest supplier, recording an import volume of 4.7 billion euros in 2021 and a cumulative rise of 68 percent over the last five years. It is one of the largest Asian economies alongside Singapore. Valencian firms have grown significantly, and the ongoing crisis between China and Taiwan threatens the foreign trade of about 15,000 companies in the region, with 8,000 of them connected to Alicante.
Data from the Alicante Chamber of Commerce, led by Carlos Baño, show 6,981 companies in the province importing 1.293 billion euros, mostly from China, in 2021. These imports cover consumer goods, capital goods, and semi finished products. Exports to China amounted to 114 million euros, including consumer goods and, notably, raw materials.
Trade with Taiwan follows a more cautious pattern. A total of 510 companies import 67 million euros, primarily automotive components and semi finished products, while 183 export 7.2 million euros, mainly food products and consumer goods.
The Valencia Chamber of Commerce emphasized that China’s external financial position benefits from a competitive and diversified sector. The rise in foreign direct investment inflows opened markets, and high national savings rates enable continued financing of investments. The chamber also noted that sectors offering opportunities include agricultural equipment, railways, airports, urban infrastructure, the environment, construction, food products, fashion and high end accessories, and luxury goods.
foreign trade in 2022
The latest statistics from the Valencia Community Regional Office of Commerce, covering January through May 2022, show exports to China at 212.6 million euros, up 11 percent from the previous year. Imports reached 4,422 million euros, up 47.6 percent over 2021.
For Taiwan, the Community’s exports totaled 51.2 million euros, up 41.4 percent from a year earlier. Imports rose 52.5 percent compared with the same period in 2021, reaching 82.5 million euros.
China’s exercises near Taiwan have already forced the diversion of about 240 cargo ships traversing routes from Southeast Asia to other global corridors, including Europe and the Americas. Meanwhile, Ukrainian grain shipments such as the MV Arizona and MV Sacura departed Ukrainian ports on a route to Istanbul for inspection before heading to China.
The region highlights that Taiwan stands as a major global supplier of semiconductors, accounting for a substantial share of world production. The scope of potential disruption encompasses critical devices including computers and mobile processors, with global repercussions should factories halt production. In May, the government announced a 12.2 billion euro investment to advance semiconductor manufacturing, signaling a push toward greater market independence.
Overall, the interplay between regional trade, geopolitical tensions, and high technology supply chains underscores the importance of diversified sourcing, resilient logistics, and strategic investment in manufacturing and infrastructure to weather shifts in global markets.