China just banned food imports over 100 Taiwanese companies right before US Speaker Nancy Pelosi landed in Taiwan, but unsurprisingly not microchips!
Here is what you need to know…
China Bans Taiwan Food Products Over Pelosi!
While US Speaker Nancy Pelosi was flying to Taiwan from Malaysia, the General Administration of Customs for China announced an import ban on food products from over 100 Taiwanese companies.
Of those 100 Taiwanese companies, 35 are exporters of biscuits and pastries, including famous Taiwanese companies like Kuo Yuan Ye Corp (郭元益), Yu Jan Shin (裕珍馨), Kuai Kuai Co (乖乖), Imei Foods Co (義美食品), Chiate Bakery (佳德) and Kuang Ta Hsiang Foodstuffs Co (廣達香).
The other companies exported food products like tea, honey and seafood. Of the 3,200 Taiwanese food products registered for export to China, 2,066 (64.6%) had their imports suspended.
Officially, Beijing says that the blacklisted companies failed to renew their export registration, and can only sell their products until the end of August 2022.
However, the late night announcement, and the fact that only Taiwanese exporters are required to file their registration documents by June 2022, instead of June 2023 like exporters from other countries; strongly suggest that this move was motivated by Pelosi’s visit.
China May Ban Taiwan Food Over Pelosi, But Not Chips!
Despite the dramatic late night announcement, this move was relatively benign as the banned exports only make up 0.1% or US$650 million of Taiwan’s total exports.
Last year, Taiwan exported US$44 million worth of pastries to China, but that fell to only US$10 million during the first half of 2022.
Seafood exports to China were more substantial at US$280 million, but tea exports were just under US$32 million, and honey exports was a minuscule US$35,000.
On the other hand, China does not dare to ban the import of Taiwanese microchips or electronics, because it has grown reliant on them.
After the US imposed sanctions on Chinese chipmakers in 2018, China increased imports of Taiwanese memory chips by a whopping 57% in just 3 years!
In fact, Taiwanese exports to China surged by 24.8% to an all-time high of US$188.9 billion in 2021, largely due to high demand for their computer chips.
No matter what their Wolf Warriors may threaten, China is still too reliant on Taiwan for high-end semiconductors to really threaten its supply, and it is not ready to invade Taiwan with a realistic chance of success.
By targeting only a small portion of relatively inconsequential Taiwanese imports, China is just slapping Taiwan on the wrist.
The Taiwanese should play along and moan like they have been mortally wounded to give China some face, so it can (gracefully) retreat from the uncomfortable corner it back itself into.
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Dr. Adrian Wong has been writing about tech and science since 1997, even publishing a book with Prentice Hall called Breaking Through The BIOS Barrier (ISBN 978-0131455368) while in medical school.
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