China restricts trade with Taiwan amid tensions over Pelosi trip | International Trade News

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China has restricted its trade with Taiwan amid heightened tensions over the visit of US House of Representatives Speaker Nancy Pelosi 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 fruits and certain types of fish.

China’s General Administration of Customs said food imports had been halted due to the presence of pesticides and the coronavirus in some shipments, while the Ministry of Commerce said it had suspended sand exports in accordance with unspecified legal provisions.

China’s Office of Taiwan Affairs separately announced that it would bar mainland Chinese companies and individuals from entering into financial transactions with two Taiwanese foundations, the Taiwan Democracy Foundation and the Taiwan International Cooperation and Development Fund.

The announcements come as Pelosi makes a high-profile visit to Taiwan despite Beijing’s warning of “serious consequences” if the veteran Democratic politician makes the trip.

The trade measures follow a notice issued 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 overnight measures could be politically motivated, as Taiwanese manufacturers were treated differently than those elsewhere, the Taipei Times reported.

China is Taiwan’s biggest trading partner, with the island’s exports to mainland China and Hong Kong reaching $188.9 billion in 2021.

US House of Representatives Speaker Nancy Pelosi travels to Taiwan despite warnings of ‘serious consequences’ from Beijing [File: Sam Yeh/AFP]

China last year banned imports of Taiwanese pineapples citing “biosecurity” concerns, in a move widely seen as an attempt to pressure Taiwanese President Tsai Ing-wen, who has sought to strengthen Taiwan’s relations and position abroad.

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

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

“I wouldn’t say it’s a key export from China, but it hurts Taiwan.”

However, Julien Chaisse, an investment and trade expert at the City University of Hong, said Taiwan imports only a very small part of its sand from China and has reduced its reliance on imports in recent years.

“I think the measure is symbolic because sand is the most consumed substance after water, being used in virtually every construction or manufacturing process,” Chaisse told Al Jazeera. “I think China took this step because it will stick, which is to say it is not a ban that can be expected to be lifted for many years to come.”

Henry Gao, a China trade expert at Singapore Management University, said Beijing should introduce new economic measures targeting Taiwan.

“I think it is likely that China will announce further economic sanctions, but they are unlikely to be effective unless China bans its biggest import from Taiwan – semiconductors,” he said. said Gao. “However, it will also hurt China itself, as many Chinese companies depend on semiconductors.”

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

In an op-ed published in the Washington Post minutes after his arrival, Pelosi said the United States could not sit idly by as Beijing “continues to threaten Taiwan — and democracy itself.”

The Chinese Foreign Ministry called the visit “extremely dangerous” and accused the US side of “playing with fire”.

The Chinese Communist Party views self-governing Taiwan as 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 only recognized by 13 countries and the Vatican, or changing the status quo, but Pelosi has the right to visit the island.

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