A Chinese investigation into Taiwanese trade barriers is likely a politically motivated attempt to increase pressure on Taipei following a meeting between President Tsai Ing-wen (蔡英文) and US House of Representatives Speaker Kevin McCarthy on April 5, researchers said on Thursday.
Beijing on Wednesday announced that it would open a probe into trade barriers imposed by Taiwan on 2,455 Chinese agricultural products, textiles, coal, minerals, metals, plastics, rubber, chemicals and construction materials.
China said the probe was opened at the behest of local trade groups.
Photo: AP
However, Chihlee University of Technology Department of International Trade associate professor Chang Hung-yuan (張弘遠) said the timing indicated that Beijing is using the probe to express its disapproval of the Tsai-McCarthy meeting.
Chang said China made a similar punitive move in August last year, when it suspended imports of more than 2,000 Taiwanese food products in the wake of Tsai’s meeting with McCarthy’s predecessor, Nancy Pelosi, in Taipei.
Chang said Taiwan does not allow imports of more than 2,000 Chinese goods out of concern over potential negative effects on local industries — a position that China previously tolerated.
However, amid changing circumstances, China has adopted a harder stance on trade with Taiwan by renewing its demands for “fair trade,” hoping to increase exports to boost its faltering economy while scoring points with nationalist Chinese, Chang said.
Yen Huai-shing (顏慧欣), an associate research fellow at the Chung-Hua Institution for Economic Research, agreed that the investigation could be a retaliatory measure for the Tsai-McCarthy meeting.
China’s decision to contest trade restrictions more than two decades after they were implemented raises questions about Beijing’s motives, she said.
If China determines that trade barriers have been unfairly imposed, it could use this to pressure Taiwan into entering into trade negotiations or arbitration presided over by a third party, Yen said.
However, it is doubtful that either side would engage in negotiations sincerely, given the situation in the Taiwan Strait, she said.
Should the investigation play out in this way, China could also take other measures trying to bend Taiwan to its will, such as imposing punitive tariffs or placing more restrictions on Taiwanese imports, Yen said.
Meanwhile, Chiou Jiunn-rong (邱俊榮), a professor in National Central University’s Department of Economics, said the timeframe in which trade inspections would be carried out — from Wednesday last week to Oct. 12, with a possible extension to Jan. 12 next year — showed that China is trying to influence Taiwan’s presidential election, which is scheduled for Jan. 13 next year.
“The move has more to do with politics than trade,” Chiou said.
Trade restrictions imposed by Taiwan are covered by WTO rules, Chiou said, citing as an example anti-dumping duties on towel imports to protect Taiwanese producers.
However, the import suspensions imposed by Beijing on Taiwanese goods are often arbitrary and highlight the volatility of China as an export market, Chiou said.
China’s latest measures could prompt Taiwanese exporters to explore other markets and reduce their reliance on China, Chiou added.
Meanwhile, Bao Cheng-ke (包承柯), a professor at East China Normal University in Shanghai, said that the investigation signaled that China is changing its “passive” attitude toward trade with Taiwan and is seeking to remove trade barriers.
Bao also attributed the trade investigation to protectionism on the part of Taipei.
It would be impossible to pressure Taiwan into opening its doors to more than 2,000 Chinese product categories at once, but at least efforts should be made to have the import bans gradually lifted, he said, calling it conducive to bilateral trade.
Bao said that rather than ending cooperation with Taiwan under the Economic Cooperation Framework Agreement, which has reduced cross-strait tariffs and trade barriers since it was signed in 2010, Beijing wishes to press Taiwan to adopt fairer and more reasonable trade practices.
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