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Taiwan Military Warns on LNG Vulnerability After China’s Drills

(Bloomberg)

(Bloomberg) -- Taiwan’s imports of liquefied natural gas could be vulnerable if China someday imposed a blockade, the archipelago’s defense chief said — highlighting the concern Beijing’s military activity is raising in Taipei.

“It’s undeniable that the imports of LNG are our weakest link,” Defense Minister Wellington Koo told lawmakers in Taipei on Wednesday, a little more than a week after China’s military held drills around the main island. Some of that activity happened in areas well off key ports.

Koo also asked rhetorically whether Taiwan could still continue industrial production during a real blockade and called for bolstering defenses. He labeled the exercises by the People’s Liberation Army, which sent a record number of warplanes across a key line in the Taiwan Strait, as “gray-zone harassment.” That was an apparent reference to the strain the PLA can place on Taiwan’s much-smaller military.

The defense minister’s remarks hint at the difficulties that any real Chinese blockade would cause for Taiwan, which makes some of the world’s most advanced computer chips. Taiwan relies on LNG purchases for nearly all of its gas supply. It imported about 21 million tons of the fuel last year valued at about $13 billion, ranking fourth in the world after Japan, China and South Korea, according to Bloomberg-compiled data.

The PLA maneuvers on Oct. 14 included areas off Kaohsiung and Taichung, which host major LNG terminals. In a clear sign Beijing intends to continue practicing encircling Taiwan, the PLA said after the latest exercises that it will respond whenever it is “provoked” by the government in Taiwan.

Taiwan sits at the heart of US-China tensions. Beijing has pledged to bring the island under its control someday, by force if necessary. The US has long been vague about its intentions in the event of a conflict, a policy known as “strategic ambiguity,” though President Joe Biden has repeatedly said the US would defend Taiwan if China attacked.

Underscoring the persistent pressure that Beijing is placing on the archipelago, Taiwan said China sailed an aircraft carrier through the strait on Tuesday night. On Sunday, the US and Canada sent warships though the roughly 160 kilometer (100 mile) wide body of water.

©2024 Bloomberg L.P.