Taiwanese investors are preparing for a hypothetical Chinese invasion. And they don’t know where to hide.

In the 1950s, China was a very different country than it is today. The Chinese Communist Party, led by Mao Zedong, had defeated the Nationalists who formed the Kuomintang after nearly three decades of armed conflict. Imperial power had disappeared, and the country had embarked on profound structural changes that culminated in the birth of the People’s Republic of China in 1949. The Kuomintang members withdrew to Taiwan that same year, and the shadow of invasion has loomed over the island ever since.

Foreign investors in Taiwan recognize they have no backup plan.
“If an attack against Taiwan occurs, the investment decision becomes binary: either we remain exposed and absorb extreme volatility, or we exit quickly to preserve capital.” These were the words of Steve Lawrence, chief investment officer of the Swiss firm Balfour Capital Group. It is crystal clear from his statement that foreign investors who have invested in Taiwanese companies are unsure how to proceed if an armed conflict between China and Taiwan ultimately breaks out.