by Brian Hioe

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Photo Credit: AcidBomber/WikiCommons/CC-BY-3.0

ATTEMPTS BY CHINA to pressure Taiwan economically continue, with China announcing the end of preferential tariffs for 134 products imported from Taiwan. These products include base oils used for lubricants, bicycles, and textiles produced in Taiwan.

This follows up on China announcing an end to preferential tariffs for 12 chemical products from Taiwan, including propylene and paraxylene, in late December. This announcement was timed to take place shortly before the 2024 presidential election in January and also entailed the announcement that China would end the Economic Cooperation Framework Agreement (ECFA) that had been inked under the Ma administration this upcoming June.

As such, the new round of ending preferential tariffs has been interpreted as a signal by China that it may soon suspend ECFA, following up on its previous threats, and as a means of applying economic pressure to the newly inaugurated Lai administration. The Mainland Affairs Council has criticized this move, stating that this will worsen cross-strait tensions.

Indeed, China has variously sought to adopt a carrot-and-stick approach to Taiwan with the Lai administration taking power. In past years, China has hit at Taiwan economically through bans for products ranging from sugar apple, wax apple, and pineapple, fish products as grouper, horsetail mackerel, and chilled beltfish, snacks such as Kuai Kuai, and drinks and liquors as Taiwan Beer and Kinmen Kaoliang. This has sometimes been a means of registering political displeasure with Taiwan, with a number of bans occurring after the August 2022 visit to Taiwan by then-US Speaker of the House Nancy Pelosi. Oftentimes, the claim was that some irregularity had been found with Taiwanese agricultural products in terms of parasites found, or contamination on frozen food, dovetailing with Chinese claims that attempted to pin the origins of the COVID-19 pandemic on frozen food from the US.

China announced an end to bans on grouper in December 2023, again, in a move likely timed to take place ahead of the January 2024 elections.

Photo credit: 維基小霸王/WikiCommons/CC BY-SA 4.0

More recently, however, China announced the lifting of its ban on Taiwanese citrus fruit, horsetail mackerel, and chilled beltfish. This was timed to take place after a visit to China by 17 KMT lawmakers led by caucus convener Fu Kun-chi, with the aim of depicting the KMT as able to dial back tensions, and allowing the KMT to frame itself as the only political party in Taiwan able to communicate with the CCP. The KMT has historically positioned itself as the only party in Taiwan deserving of political power in Taiwan on this basis.

It is unclear if China will follow suit on ending ECFA. In the 2024 election cycle, the KMT continued to call for a restrengthening of economic ties with China, inclusive of touting ECFA, and the dangers of an end to ECFA if the DPP were to main power. Likewise, the KMT called for the revival of talks over the controversial Cross-Strait Services Trade Agreement (CSSTA), the trade bill that public anger over sparked the 2014 Sunflower Movement. The KMT has generally framed the CSSTA as building on and expanding ECFA.

Still, China may perhaps be weakening one of the means by which it has traditionally sought to influence Taiwan through ending ECFA. Caution of the Chinese market is on the rise for agriculture and other industries, due to the possibility of arbitrarily being targeted by the Chinese government with bans. Likewise, there have been cases of Taiwanese companies being framed as “pro-independence” by the Chinese government and hit with fines, something that further contributes to the perception that the Chinese market is full of arbitrary political risks.

This occurred in past years with the decline in Chinese tourists to Taiwan since the Tsai administration took office. Although the Chinese government decreased the number of group tours to Taiwan as a means of signaling displeasure, this had the effect of eroding the perception that the Chinese government hoped to project of the Taiwanese economy being wholly dependent on Chinese tourism, such that China could “turn off” the Taiwanese economy if it so desired. This perception was further eroded after the COVID-19 pandemic, resulting in no tourism occurring for Taiwan as a whole. It is to be seen if this could also occur with an end to ECFA.

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