Tests conducted on one of Taiwan’s most sought-after crops, which mainland Chinese consumers highly prize, have found traces of mealybug insects. Beijing’s Taiwan Affairs Office responded by suggesting that these “pests” pose potential threats to their agricultural productivity and overall “ecological safety.”
Confirming this, Taiwan’s Ministry of Agriculture described the ensuing ban as a “one-sided” act. This isn’t the first of its kind. Over the past couple of years, Beijing has issued similar bans on various Taiwanese imports, including pineapples, wax apples, citrus fruits, and certain seafoods.
This agricultural conflict coincides with political tensions. Just last week, after a brief stay in New York by Lai on his way to Paraguay for President Santiago Pena’s inauguration, mainland China imposed anti-dumping measures on certain imports from Taiwan. Beijing expressed displeasure at Washington for hosting Lai, a move interpreted as an affront, especially given Lai’s stance on Taiwan independence. It’s worth noting that he also visited San Francisco on his return.
At the heart of these tensions is mainland China’s view of Taiwan as a renegade territory that should be reunited, by force if necessary. Relations have deteriorated lately, making Taiwan a potential area of conflict between China and the US.
However, US-Taiwan relationships have warmed, particularly since Nancy Pelosi’s visit to Taipei in August 2022. Despite this, countries with diplomatic ties to Beijing, including the US, recognize the one-China principle, which perceives Taiwan as part of China. Washington has always maintained that any change to this delicate balance, termed the cross-strait status quo, should be contested.
Looking at Taiwan’s agricultural exports in figures, the Ministry of Agriculture in Taipei reports that of the 170,000 metric tonnes of mangoes produced this year, only a minor 2.2 per cent is meant for export. Out of this, mainland China received just 938 metric tonnes in 2023.
Following the ban, the Taiwan Affairs Office has stated that they’ve informed Taiwanese officials and emphasized the need for better plant quarantine measures. They’ve defended their actions as consistent with established biosecurity measures. The Ministry in Taipei has recognized the notification about shipments containing mealybugs from June and early August. Taiwanese farmers and businesses have since been alerted and urged to rectify the issue. Despite these complications, 5,600 mango shipments have made it to mainland China since 2018.
Taiwan’s response to the ban is clear. They regret the lack of scientific dialogue and unilateral decisions, urging China for technical discussions to resolve the matter. Despite the ban’s implications, mango growers in Pingtung county remain relatively unperturbed, citing their primary focus on domestic and other Asian markets.
Taiwan’s Ministry of Economic Affairs recently shared trade figures, highlighting a 4.2 per cent drop in export orders to mainland China and Hong Kong compared to last year, which is relatively moderate given the steeper decline earlier this year. In contrast, Taiwan’s global export orders plunged by 12 per cent in the same timeframe, amounting to US$47.73 billion. This dip corresponds with a downward adjustment in Taiwan’s projected GDP growth for 2023.
The global economic environment, characterized by waning demand and inventory adjustments, has been challenging for Taiwan. Particularly concerning is the significant 18.6 per cent drop in orders from the US, Taiwan’s largest market, as of July. Additionally, amidst rising inflation and interest rates in the West, Taiwan’s export orders from Europe plummeted by 32 per cent. Economist Heron Lim of Moody’s Analytics in Singapore notes that China’s faltering recovery is a growing concern, but Europe and the US markets may see more significant dips.
Interestingly, Southeast Asia defied the trend, increasing orders from Taiwan by 33.7 per cent in July compared to the previous year.
Taiwan’s exports, particularly in hi-tech hardware like semiconductor chips, hold global significance. These chips form a considerable chunk of the global market, with Taiwan contributing to about 60 per cent of the supply. However, the post-pandemic era has seen a decline in tech hardware demand as the initial surge during the pandemic fades.
Consumer electronics orders from Taiwan witnessed a 0.4 per cent decrease, amounting to US$17.71 billion, while telecommunications products orders fell by 14.9 per cent. Analyst Woods Chen from Yuanta Securities in Taipei predicts this sluggish trend in export orders to persist through the year’s end.
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