Not quite. Taiwan is more fertile, has a far better educated population (the majority of Hainanese are dirt poor farmers), better governance, more roads and infrastructure, better surfing, food, agriculture, R&D, universities, etc.
Hainan has better weather and beaches and prettier women.
You are right however you could say this about many countries. Japan for example and to varying degrees many others. Even the US, which relies on imports of energy and other resources to maintain it’s standard of living. I don’t think much of the world is ever going to completely stop buying what Taiwan makes. It’s really a question of if other countries will make what Taiwan makes at a lower cost.
I think Taiwan isn’t in such a bad spot, there is not going to be a huge depression as things are run pretty tight overall and as I mentioned before a lot of the uncompetitive factories and industries moved overseas long ago. Taiwan mainly needs to broaden it’s economic structure and focus on improving the living environment. The NTD is not going to crash as it is backed by huge foreign reserves and even if it depreciates from it’s already low exchange rate it will make exports more competitive. Nope there are far more things to worry about than the NTD.
I have exchanged NT$ with little % screw tax in Thailand, Palau (uses USD), Canada, Japan, Philippines and Malaysia. Never had an issue, and all were direct conversions to that country’s currency. i cannot remember ever paying more than 7% more than actual exchange rates, that was in malaysia.
Impossible, NTD must covert through the USD, it’s just the conversion rate must have been reasonable and they didn’t inform you or you used an informal moneyseller.