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29 September 2022


Business Insider Bangladesh

China restricts trade with Taiwan amid tensions over Pelosi trip

BI Desk || BusinessInsider

Published: 15:51, 3 August 2022  
China restricts trade with Taiwan amid tensions over Pelosi trip

Photo: Collected

China has restricted its trade with Taiwan amid elevated tensions over United States House of Representatives Speaker Nancy Pelosi’s visit to the democratically-ruled island.

Chinese commerce and customs authorities said on Wednesday they had halted exports of sand, a key material used in construction, and imports of Taiwanese citrus fruit and some types of fish.

China’s General Administration of Customs said the food imports were halted due to the presence of pesticide and the coronavirus in some shipments, while the Ministry of Commerce said it had suspended sand exports in line with unspecified legal provisions, reports Al Jazeera.

China’s Taiwan Affairs Office separately announced it would prohibit mainland Chinese companies and individuals from financial dealings with two Taiwanese foundations, the Taiwan Foundation for Democracy and the Taiwan International Cooperation and Development Fund.

The announcements come as Pelosi conducts a high-profile visit to Taiwan despite Beijing warning of “serious consequences” should the veteran Democratic politician make the trip.

The trade measures follow a notice by China’s customs agency on Monday that it had blacklisted more than 100 Taiwanese food brands for failing to renew their export registration.

Wu Shou-Mei, director-general of Taiwan’s Food and Drug Administration, said the moves overnight may be politically motivated as Taiwanese manufacturers were being treated differently than those from elsewhere, the Taipei Times reported.

China is Taiwan’s largest trade partner, with the island’s exports to mainland China and Hong Kong reaching $188.9bn in 2021.

China last year banned imports of Taiwanese pineapples citing “biosafety” concerns, in a move widely seen as an attempt to put pressure on Taiwanese President Tsai Ing-wen, who has sought to boost Taiwan’s relationships and standing overseas.

China has been accused of using trade as a weapon in recent years, with Australia and Lithuania seeing their exports hit with tariffs and other restrictions after becoming embroiled in disputes with Beijing.

Alicia García-Herrero, chief Asia Pacific economist at Natixis in Hong Kong, said suspending fruit and fish imports would have a negligible effect on Taiwan’s economy, but halting sand exports could have a significant impact as construction has become an important source of economic growth during the pandemic.

“There have been shortages of sand and gravel for some time in Taiwan,”  García-Herrero told Al Jazeera.

“I would not say it is a key export from China but it does hurt Taiwan.”

Henry Gao, an expert in Chinese trade at Singapore Management University, said that while sand is an important resource for Taiwan, with uses in the tech and military spheres as well as construction, the island should be able to easily source it from elsewhere.

“I think it is likely that China will announce other economic sanctions, but it is unlikely to be effective unless China bans its biggest import from Taiwan – semiconductors,” Gao said. “However, that will hurt China itself, too, as so many Chinese firms rely on the semiconductors.”

Pelosi, the third-highest ranking official in the US government, touched down in Taipei on Tuesday night as part of a five-leg Asia tour that includes Japan, South Korea, Singapore and Malaysia.

In an op-ed published in the Washington Post minutes after her arrival, Pelosi said the US could not stand by as Beijing “proceeds to threaten Taiwan – and democracy itself”.

China’s foreign ministry has slammed the visit as “extremely dangerous” and accused the US side of “playing with fire”.

China’s Communist Party considers self-ruled Taiwan a renegade province that must be “reunified” with the mainland, by force if necessary, although the party has never had control of the island.

The Biden administration has said it does not support independence for Taiwan, which is recognised by just 13 countries and the Vatican, or changing the status quo, but that Pelosi has the right to visit the island.

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