Having arrived in Taiwan during the particularly dry summer of 2018, I’ve been quite surprised by 2019’s heavy rainfall, but whenever I ask locals when summer might start delivering reliable sunshine, I’m normally brushed off with the claim that, ‘as a Brit, I must be used to the rain.’ As much as I hate to bust a treasured British stereotype, Taipei is far more rainy by far than anywhere I’ve ever lived. 

If fact, Taiwan has the highest rainfall of any advanced economy anywhere, outstripping famously rainy Singapore, Iceland and even Norway. (London’s unusual topography and concrete structure actually means that it experiences fewer annual days of rain than even Miami).

For someone who left the UK in search of better weather, Taipei’s rainy weather has been a pretty tough pill to swallow. 

If you can disregard my own unrealistic expectations of endless sunshine, this overabundance of water could yet prove a real advantage to Taiwan. As the century progresses, the UN estimates that 5.7 billion people around the world will soon be affected by annual water shortages.

EU experts predict water shortages could lead to increasingly dangerous international relations, with India and China, home to 38% of the world’s population, predicted to be hit particularly hard. 

                       

A 2012 article in Scientific American suggests that water could yet become the chief commodity of the 21^st Century, and predicts a global network of water-trading units springing up around the globe. Following suit, the BBC has published a big piece on how ‘hydro’politics’ will shape the 21^st century and the bombastic Canadian conspiracy site known enigmatically as ‘Global Research’ reported late last year that water barons and mega-banks are preemptively buying up control of the world’s waterways.

To bring a veneer of respectability back to this article, the Financial Times has also joined the chorus, predicting that water will become more valuable than oil before the century is done. 

Is it possible that climate change and population growth could yet turn Taiwan’s rain into a real source of value? 

Surprisingly, there are a few decent historical precedents for International Water Exporting. 

Canada is gifted with large amounts of a lot of different resources, including 7% of the world’s renewable fresh water- some of which is currently exported South to the USA.

As it stands, exports are limited to 20 litre bottles, but bigger plans have previously been proposed, most notably, a plan to divert a trilogy of Canadian rivers into an 800 km Rocky Mountain Trench and a late 90’s scheme to ship water from lake superior to Asia via tankers, shut down in the face of public pressure.

Germany has a successful history of using artificial canals to move liquid between its federated states, and Russia has toyed with the idea of hydrating Uzbekistan, Kazakhstan and Afghanistan using a similar method.

To draw a region-sensitive comparison, Hong Kong has drawn water from China since the 60’s, before which it enjoyed as many as 300 days of water rationing per year.

The BBC also ran a recent article highlighting an oncoming glut of retired oil tanker ships if Taiwan wanted to pick up a new water-exporting megafleet on the cheap.

Suffice to say, if water has been deemed valuable enough to consider building an 800 km reservoir and to ship it across the Pacific, traversing the Taiwan strait to deliver water to mainland Asia isn’t impossible to imagine. 

But even with the necessary rain volume and a local captive market, does Taiwan have the means to ready water for export? Despite the heavy rainfall, Taiwan strangely suffers from semi-regular droughts, with only 21% of the island’s 803,000 million cubic metres of annual national rainfall put to use.

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For comparison, the USA holds sufficient reservoir capacity to meet the country’s water needs for 24 years of drought, and Japan holds enough reserves to last for 4 months. By comparison Taiwan’s reserves clock in at a paltry 41 days. 

This is such a low figure that Korean companies have apparently used this figure to question the reliability of Taiwan as a manufacturing base.

A few different factors contribute to Taiwan’s modest water storage capacity. A local penchant for high-altitude ginger farming combined with the steep climbs of Taiwan’s mountains means that soil erosion is common and plentiful. In turn, this clogs up the country’s waterways, with one CommonWealth study claiming that silt now accounts for a third of the capacity in six of Taiwan’s 18 main reservoirs.

An uptick in typhoons has also contributed to sediment collection, with one study allocating blame to a 50% rise in regional typhoon frequency over the last 40 years.

Cleaning the silt from Taiwan’s reservoirs is also easier said than done, with reservoir silt removal costing on average NTD$500 per cubic metre. For perspective, Taiwan’s current total reservoir capacity stands at 1,963,2953 m³, of which 588,988.53 m³ is apparently silt.

As a quick estimate, that gives us a total reservoir sediment removal cost of NTD$294,494,250. It has been suggested that building new reservoirs with special silt-repelling features may be a more economical way of storing more water, instead of cleaning out existing structures.

Taiwan’s economy is already export-focused, clocking annual revenues of $302 billion, of which the largest contributor is a $57.9 billion yield on Integrated circuits – also known as semiconductors. (Read: TSMC’s Unsung Weapon)

As a barrier to the free flow of water out the country, manufacturing just one of these circuits requires 2,200 gallons of water. To make a semiconductor, water is first converted into Ultra Pure Water, a liquid so many thousands of times more pure than drinking water that it is technically considered an industrial solvent. Once converted, Ultra Pure Water is used to repeatedly wash the silicon chip clean, the eventual outcome of which, once the 2,200 gallons has been fully utilised, is one 30 cm semiconductor wafer. 

Should water export lead to an increase in water prices, any impact on the profitability of the water-thirsty semiconductor industry is likely to be very poorly received. In addition, if exporting water to China enables the mainland to lower the cost of their chip output and gain a competitive edge against Taiwan, the overall wisdom of exporting water starts to become rather shaky.

Another factor to consider is the impact on agriculture, a big feature of Taiwanese economic life following the retrocession from Japan – accounting for as much as 35.8% of GDP in 1951.

Nowadays, that GDP contribution has dropped, with agriculture contributing as little as 1.6% of GDP in 2010. Despite this massive drop in GDP contributions, agriculture accounts for 70% of overall water use. As a direct comparison to Taiwan’s semiconductor export yield detailed above, Taiwan’s total agricultural export was valued at $5.47 billion in 2018. 

Though diverting water from crops to export might make sense at some level, it might upset the 1,393,000 people, or 5.91% of the total national population, involved in the agricultural sector. It’s also not hard to imagine that an uptick in water costs & fruit fees might threaten Taiwan’s proud status as one the the highest per capita consumers of fresh fruit, as outlined by an enthusiastic Export.Gov report keen to encourage US farmers to start selling their excess fruit over here.

To circle back to my earlier digression on the glut of decommissioned oil tankers, it may be worth noting that Taiwan’s #1 Commodity export is a $21.1 billion annual flow of refined petroleum, suggesting that Taiwan may be quite familiar with exporting large volume, high-value liquids overseas.

At the end of all that we’ve come to a fairly mixed message. Though Taiwan is blessed with plenty of water, its water storage and management would need large investments to make mass water storage feasible. Water usage is high in both agriculture and industry, but yields a mixture of high and low value goods of mixed economic benefit. 

Taiwan has abundant access to an asset which is only likely to grow in value, and access to an increasingly wealthy, numerous audience whose appetite for that asset is will continue to grow. However, Taiwan’s path to water export is troubled by issues of organisation and infrastructure which may prevent this becoming a reality, even as the opportunity grows.

Edited by Mollie Moric, Sharon Tseng

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About the Author
James Grant is a contributing writer at CommonWealth Magazine. He writes mainly on topics of politics, economics and Universal Basic Income.

(This article presents the opinion or perspective of the original author / organization, which does not represent the standpoint of CommonWealth Magazine.)