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China blocks some Taiwanese imports but avoids chip disruption

BEIJING — China has blocked citrus and fish imports from Taiwan in retaliation for a visit by Nancy Pelosi, a top US lawmaker, to the self-ruled island but has avoided disrupting one of its tech ties. and the world’s most important producer.

The two sides split in 1949 after a civil war, have no formal relations but have a multi-billion dollar business relationship, especially over the line of Taiwanese-made processor chips that factories China assembles smartphones and other electronic devices the world needs.

They built that business while Beijing threatened for decades to enforce the ruling Communist Party’s claim to the island by attacking.

Two-way trade grew 26% last year to $328.3 billion. Taiwan, which makes half of the world’s processor chips and has technology the mainland can’t match, said sales to Chinese factories rose 24.4 percent to $104.3 billion. .

“The global economy cannot function without chips made in Taiwan or China,” said Carl B. Weinberg of High Frequency Economics.

On Wednesday, Beijing blocked imports of frozen citrus fruit and mackerel from Taiwan after Pelosi, the speaker of the House, arrived in Taiwan late Tuesday. However, the ruling party has avoided disrupting the flow of chips and other industrial components, a move that would send shock waves through the faltering global economy.

Beijing also announced a four-day military exercise with artillery fire in the waters around Taiwan. That could delay or disrupt shipping to and from the island, one of the world’s largest traders.

Potential disruptions add to concerns about weakening global economic growth, but Asian stock markets rose on Wednesday after there was no immediate sign of China’s military action. .

The Communist Party says Pelosi’s visit could spur Taiwan to realize its decades-old de facto independence. Beijing says that will lead to war.

The administration of US President Joe Biden has sought to downplay the volume of the visit, insisting there is no change in the longstanding US “one China policy”, which recognizes Beijing but allows non-binding relations. official and defense relations with Taipei.

Meeting with leaders in Taiwan, Pelosi said she and other members of Congress in a visiting delegation showed they would not abandon their commitment to the self-governing island.

“America’s determination to preserve democracy, in Taiwan and around the world, remains limited,” Pelosi said in a brief speech during a meeting with Taiwanese President Tsai Ing-wen.

“Faced with purported military threats, Taiwan will not back down,” Tsai said.

The import ban on frozen citrus fruits and mackerel will hurt suppliers seen as supporters of Tsaí.

Taiwan plays a large role in the chip industry for an island of 15 million people that accounts for more than half of the global supply.

Its manufacturers include Taiwan Semiconductor Manufacturing Corporation which produces the most advanced microprocessors for smartphones, tablets, medical devices and other products. Taiwan said chip sales to Chinese factories rose 24.4 percent last year to $104.3 billion.

Beijing has invested billions of dollars to develop its own industry, which supplies low-end chips for cars and home appliances, but cannot support the latest smartphones, tablets, gadgets. medical equipment and other products.

French fries are China’s biggest import at more than $400 billion a year, ahead of crude oil.

That focus has raised concerns in the United States and Europe about relying too heavily on supplies that could be disrupted by conflict. The US government is trying to expand its chip production capacity in the country.

Overall, China is Taiwan’s largest trading partner, accounting for more than twice as much exports as the United States, the island’s number two foreign market.

Beijing has tried to use its market access to undermine Mr. Tsai and other Taiwanese leaders it accuses of pursuing independence.

Customs authorities blocked imports of cookies and other food products from more than 100 Taiwanese suppliers on Monday ahead of Pelosi’s visit, according to the Global Times and other Chinese news agencies. There is no official announcement.

The Communist Party has also used military action in the past to try to hurt Taiwan’s leaders by disrupting the island’s economy.

The mainland attempted to drive voters away from then-President Lee Teng-hui before the island’s first direct presidential election in 1996 by firing missiles at shipping lanes.

That forced shippers to cancel trips and increase insurance costs but had the opposite effect of allowing Lee to brag about siding with Beijing to the cheers of his supporters. Lee won the quadrilateral election with 54% of the vote.

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