Without prior warning, China’s General Administration of Customs announced on February the 26th that mainland China will suspend the import of Taiwanese pineapples from March 1st onwards, citing the detection of “quarantine pests” on them. The news came out of the blue, prompting an instant outcry in Taiwan. In response, Taiwan’s government departments responsible for agriculture convened an impromptu press conference to explain the related countermeasures.

Pineapples are an important crop for Taiwan’s economy, with an annual production of about 420,000 metric tons. About 45,000 metric tons of pineapples are exported overseas every year, 95% of which go to China. According to the Council of Agriculture, our country’s pineapples exported to mainland China since 2020 have had a passing rate of 99.7%. It accused China of violating international norms. At a time when Taiwanese pineapples hit their peak season, China’s sudden ban on the fruit is undoubtedly a heavy blow to the industry.

Perhaps to us Taiwanese people, the memory of similar incidents is still fresh. On the 27th of last month, the Taiwan Affairs Office of the State Council suddenly announced that China would suspend the import of the meat products produced in or transferred via Taiwan on the grounds that Taiwan has allowed the import of US pork containing ractopamine as well as the avian flu. When it comes to meat products, however, the amount of Taiwan’s exports to China has been low over the past few years, so the move did not receive as much attention as the latest incident.

If we look back at the production and sales of pineapples in the past, it can be seen that pineapple exports to China began to grow rapidly only after 2014, reaching a peak in 2019. The imports have been mainly concentrated in the Chinese market. According to statistics by the Council of Agriculture, in addition to pineapples, fruit exports also include betel nuts, Java apples, pineapple custard apples, grapefruits and oranges. Of these fruits, pineapples have accounted for the highest exports to China in monetary terms, far exceeding the other five products.

As a result, judging from the products targeted by the Taiwan Affairs Office’s bans and the timing of its release of such information, China’s move has been well-planned every step of the way. For instance, China banned our meat product imports just when Taiwan’s society was having reservations about opening up its markets to ractopamine-laden US pork. It banned pineapple imports just when Taiwan’s pineapple farmers were entering the peak harvest season. Why has China repeatedly banned the import of our agricultural products when it sought to sanction Taiwan? The possible reasons are as follows:

First, the implementation of economic sanctions is like firing a bullet. In the ideal situation, the bullet is fired, but the shooter does not feel strong recoil himself when the opponent is hit hard. A ban on Taiwan’s agricultural products works exactly this way, producing the desired results. With its limited land resources, it is difficult for Taiwan to increase agricultural production, and its products are mainly sold domestically. Even if there are any exports, the amounts are small. Additionally, with the restrictions of transportation and quarantine arrangements, it is extremely likely for Taiwan’s agricultural industry to focus on a single market. This allows China to easily gain an advantage in the market of agricultural products, so there is room for operations.

Second, in the “measures towards Taiwan” that China is still implementing, it is endeavoring to lure Taiwanese businesses and talents mostly in fields related to advanced manufacturing. Given the Sino-US trade war and technological sanctions, in particular, China has a high demand for key parts produced in Taiwan’s tech industry and Taiwan’s talents. To maintain business operations and investor confidence, it is certain that China will not impose sanctions on these industries in Taiwan.

Moreover, Taiwan’s agricultural industry can long be characterized as “local”, “vulnerable”, and “in need of help from government policies”, which is why it is increasingly linked with politics. No matter whether it is the signature of FTAs (Free Trade Agreements) or local elections big or small, the agricultural industry could play a key role in determining success or failure. Such being the case, while mainland China’s choice of Taiwan’s agricultural products as the target of its sanctions does not affect its own interests much, it can engender serious repercussions in Taiwan’s society and political landscape. The impact is extremely huge.

Finally, although the mainland has made multiple moves on Taiwan recently, the future development of cross-strait relations is not necessarily gloomy. It is because the mainland’s current “suspension” of specific goods from Taiwan has been imposed mainly on the grounds of quarantine arrangements or public health, and the economic impact of the selected products is still tolerable. More importantly, the international atmosphere is changing.

It is expected that under the new policies of the Biden administration, the US and China have ushered in new changes in the situation. Meanwhile, China has entered the “14th Five-Year Plan” period, and the CCP is about to convene the “Two Sessions” in March. Therefore, at this stage, the CCP is desperate to show its grasp of and say in the new situation. This explains why it has repeatedly made tough and preemptive moves. Judging from its two recent moves targeting our country’s meat products and pineapples, the CCP’s intention is more about causing political antagonism in Taiwan domestically and panic in society than about dealing a blow to our industries and economy.

In the future, if the international situation eases, especially with the improvement of US-China relations, the two sides of the Taiwan Strait might have room for more rational treatment towards each other. At this stage it is not appropriate to over-intensify the antagonism lest a lose-lose situation should ensue. In addition, as the situation is unclear at this stage, we cannot rule out the possibility that the mainland might still have a string of small-scale sanctions in the pipeline. It is necessary to get prepared and draw up related remedial measures as soon as possible.

(Wu Chia-Hsuan, Deputy Director of the First Research Division, Chung-Hua Institution for Economic Research)

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