Besides all of the obvious concerns regarding China invading or trying to take over Taiwan I am concerned about the impact on the NT Dollar.
In my opinion, there will not be a full blown invasion with millions of people dying in Taiwan. I believe will be a stranglehold method of pressuring Taiwan to capsize economically. That would include import/export restrictions to Taiwan, pressuring companies/countries to withhold oil, gas and other shipments to Taiwan. And of course China blockading as much of Taiwan as they can with regards, the air travel and shipping. To me the economy will begin a downspin which would be hard to control. And during this mayhem the NT$ will be in major flux. Inflation will be rampant and barter might be a way of life. Anyway, I know there are many opinions about what method China will take. But to me any method will have an immediate impact on the Taiwan dollar.
I am interested to hear other’s opinion about the impact on the Taiwan dollar and any related scenarios which might occur:
-Will China simply let the NT$ nosedive? I do not think so. I do not think China wants to take over a financially bankrupt country.
-Will China try to move Taiwan to use the RMB? I would think this is a possibility but an enormous task. Perhaps China will issue Taiwan (and citizens) a deadline to move to Renminbi and set annual exchange rates. To me I do not think citizens have much choice and will make the move to RMB. (Of course, this is when all is lost and Taiwan government would not restrict such exchanges)
Of course, the wealthy have stashed money abroad to survive the worst case scenario. Even I have arranged 25% of my money abroad as a buffer. And I wonder about access to my own investments made through banks here for bonds, ETFs, etc. Will access be restricted? So many questions…and my small brain is so incapable of answers.
Taiwan has lots of other currencies to back up the T$ (if needs to). (Tripe what UK has, UK has much more people too, but quid is strong now despite that)
In my own personal opinion, if the worst would happen, China would keep the TWD as a separate currency for several years. Note it’s not only Taiwanese that have TWD, so can’t force a swap so fast as then the currency speculation would go crazy. Hedge funds would benefit too much.
I don’t think China would risk the Taiwanese banking sector to crash, so money in the bank will still be there, whatever in TWD, USD, Euro… But of course the exchange rate will go roller coasters
Anyway, as a word of caution, having some money in banks abroad is always recommended, imagine an evacuation scenario when one couldn’t touch the money in Taiwanese banks for some time, need some cash to live and provide for the family
Just speculations here though, and how it would play out is anybody’s guess. Even if China would have a plan now, I would expect it to be a floating plan which could change depending on what happens. They wouldn’t want foreign banks to profit heaps on any scenario
And I hope we will never ever have to find this out…
China will impose a blockade but will allow anyone who wants to leave - particularly foreigners- to leave. It will offer Taiwan citizens conversion from NTD to RMB as an incentive to capitulate. If you have a Taiwan spouse you should be okay.
Hong Kong wasn’t invaded, Hong Kong has a separate economy and is/was a global financial hub, it was originally in the PRC’s interest to keep it that way.
Taiwan is not a financial hub, if Taiwan was to be taken by China it will likely be by force. I’m guessing any invading force would replace the local currency at first with occupation notes, that don’t amount to a currency, to exercise total control over the population and prevent a flight of capital. Then a decade or so later when the re-education camps have ended allow RMB to be the legal tender.
It was in the PRCs interest to allow Hong Kong to have its freedoms at first too. There is no point for China to keep NTD it has no special value for them.
If China takes Taiwan by force it will be brutal, they won’t care about the Taiwan economy at all.
It is really apples and oranges… And a different time, when Hong Kong was handed over, China wasn’t the powerhouse it is today.
Gold. In small denominations. From a country’s mint that is actually globally respected as being trust worthy (ie. Canada).
This has been discussed numerous times already. If the worry is savings, either export your funds (also common, and local banks have strict rules on large money transfers for this exact concern), or invest in business. If escape is the goal, gold coins for bribes and bartar. All logical steps that are pretty historically rock solid.
When they invade another territory it is basically the 1900s again. Even if they left NTD in place it would be worthless overnight when the Taiwanese make a run on the banks, and international banks stop buying it.
Any sucessful invasion doesn’t end nicely, re-education camps would be on the cards like in xinjiang.
If Taiwan allows a Hong Kong style takeover, they might be allowed to keep the money for a while. If there is a shooting war and the government in Taiwan is removed by force, I wouldn’t expect it.
USD EUR If it is sitting in a Taiwan bank, then they wouldn’t hold it anymore, if sitting offshore and they are still in Taiwan, they wouldn’t have any access to it.
Property, you only hold at the will of the government.
Shares, if Taiwan shares, they would now be worthless. If foreign shares, no access.
I think erasing their wealth will be the thing that makes camps necessary. If the CCP can lean on common culture and maintain the wealth their takeover will go much more easily
