Taiwan Plans to Shift Medical Supply Chain Away from China

If you’ve got a moment, check your medicine cabinet right now. Take a minute, see what you have in there, and come back to this post.

When you looked in there, you probably saw some prescription meds. There may have been some over-the-counter options, such as ibuprofen or Tylenol.

You may even have some items from brands like Neuroscience and Pure Encapsulations to support your overall health and wellness.

What you may not know about many of those items is where the active ingredients originate. Over the past several years, China has become the global leader in pharmaceutical production. 

Although much of the research takes place in the United States, the ingredients come from China. In August, Taiwan decided to make a public show of strengthening ties with Americans by getting involved with a memo of understanding about creating more domestic medical supply manufacturing opportunities.

Why Does Manufacturing Need to Move Away from China?

When one country becomes entirely dependent on another for essential goods, what happens if the relationship sours?

If shipping disruptions create logistical challenges to deliver necessary items promptly, how can individual families get the products they need to survive?

After the COVID-19 lockdowns that started in January in China, it became clear that many countries were relying on the cheap production methods found there for many needs. If the Chinese weren’t manufacturing ingredients, the products couldn’t get made.

Taiwan shut down its Chinese ties to protect itself against COVID-19 infections. Their efforts have shown that the medical supply chain can survive when efforts are made to expand domestic supply chains.

Having a relationship with the United States for this effort makes sense. About 70% of the current biotech research and development talents in Taiwan received training in the U.S. for what they can do today.

Although China isn’t happy about this shift, its economy is one of the few growing globally. One market may sour, but another door always opens soon after because of their lower costs.

Why Are There Protests in Hong Kong?

Protests in Hong Kong throughout 2019 involve a pro-democracy movement in the semi-autonomous region of China. The initial outburst occurred in June when the government would have allowed extradition to the mainland over alleged crimes. 

There was a fear that this action could lead to oppression against those who had made a stand against communism in the past.

The plans to allow extradition got scrapped in September, but the protests are continuing. It now involves demands to look into issues of police brutality while wanting expanded democratic reforms.

Why Does China Allow These Protests to Continue?

China’s history with protestors is one that involves death and destruction. Why does the government allow Hong Kong to continue making global headlines with these activities when the communist government usually takes the opposite approach?

It is because Hong Kong has a special status within the Chinese government. It was a British colony for over 150 years, with part of the island captured after a war in 1842. China then leased the rest of the land to the UK for 99 years. The economy became a thriving hub in Asia thanks to manufacturing innovation, but it was also a popular destination for people fleeing from persecution, poverty, or instability on the mainland.

The Chinese and British governments eventually agreed in 1984 that a handover of Hong Kong would happen only if it could operate under the principle of having one country, but with two systems.

These agreements were set to last through to 2047, allowing Hong Kong a high degree of autonomy, except for defensive or foreign affairs. Even the rights to free speech and freedom of assembly are allowed in Hong Kong. It’s one of the few places under Chinese rule where the Tiananmen Square violence from 1989 receives any recognition.

Is China Already Meddling in Hong Kong?

Critics say that China has already started meddling in the affairs of the former colony. Writers and artists talk about being under increased pressure to censor their works. Booksellers have disappeared, only to be found in the custody of law enforcement in China.

Imagine feeling safe in your home, believing that you could do as you wish, but one day you find a security camera in your bedroom linked to someone who you don’t know. People once felt secure and with a bright future ahead of them, but now they fear being watched and at risk of harm if they step out of line even in their own home.

What makes matters even more complex is that most people in Hong Kong don’t identify as being Chinese. Over 70% say that they are “Hong Kongers,” and only 1 in 10 say that they would even associate themselves with the mainland. 

The protests continue because there is a real fear that Hong Kong will become “just another city” for China to exploit if democracy is cast aside. Until more pro-democracy actions are taken, these activities will likely continue indefinitely.

How China’s Social Credit System Works

Can you imagine what life would be like if every in-person interaction you had with someone received a rating?

China is experiencing this right now with the government’s social credit system. Each citizen receives a rank based on their observed behavior. Much like a financial credit score, you can do better or get worse based on the decisions you make.

The goal is to have one centralized system in place by the end of 2020. Its currently being run in a piecemeal fashion with city councils and private technology firms monitoring the information. 

What is the overall goal of the social credit system in China? The government plans to offer rewards or consequences based on individual scores.

The Social Credit System Was First Announced in 2014

China isn’t jumping into the idea of a social credit system headfirst. This idea has been under development for over five years. The goal is to reinforce the idea that maintaining trust is a positive experience, while breaking it is a disgraceful way to live.

Millions of people are already participating in this system’s beta program. The scheme is mandatory when it goes live for the entire population.

The exact methodology of how someone raises or lowers their personal scores is kept secret by the Chinese government, but some choices have resulted in noticeable changes. If you get caught with a driving violation, smoke in places without permission, or buy more video games “than necessary,” your scores can go down.

If they go down too far, then that person will experience government-based restrictions.

What Happens with a Poor Social Credit Score?

China is already punishing people who have a social credit score that they deem to be too low. Over 9 million people are now blocked from purchasing tickets for domestic flights in the country, while another 3 million individuals cannot buy business-class train tickets. 

Just the act of trying to purchase something when restricted can lower your score even more.

China is also throttling the Internet speeds of those with low social credit scores. The system will monitor who pays their bills on time, who plays video games for a long time each day, and even individual purchases.

When 17 people refused to carry out military duties in China, they could not enroll in higher education programs. These individuals were barred from high school or continuing their college-level studies. One student was denied an incoming spot because his father had a bad score in this system.

The social credit system will eventually give the best jobs to the people with the highest scores. It will stop people with bad scores from booking premium hotel rooms, participating in holiday activities, or even taking a vacation.

If you have a good score, then the Chinese government can speed up your travel applications to various locations around the world, including Europe. One woman even said she could book rooms without paying a cash deposit because of your decisions.

China wants to warn people about who its “bad” citizens are. Will it change individual behavior in positive ways, or is it just another scheme to manipulate choices based on government preferences?