The restrictions include the suspension of some fruit and fish imports from Taiwan and exports of natural sand to the island.
Experts are also concerned about the impact escalating tensions between Taipei and Beijing may have on Taiwan’s semiconductor industry.
China’s Taiwan Affairs Office said on Wednesday it would suspend imports of grapefruit, lemons, oranges and other citrus fruits, as well as chilled white striped hairtail and frozen horse mackerel from Taiwan.
In a separate statement, Chinese customs officials said the citrus import suspension is a result of “pest control” and “excessive pesticide residues,” citing “Covid prevention” for the suspension of imports. imports of sea products.
Meanwhile, China’s Ministry of Commerce has suspended exports of natural sand to Taiwan, a key component for the production of semiconductor chips.
“Nancy Pelosi’s visit to Taiwan has drawn the expected wrath of the Chinese authorities,” analysts at ING Group said on Wednesday.
In response, Taiwan officials said China’s suspension of sand exports would have a “limited” effect and that Chinese sand represents “less than one percent” of its total demand.
China has previously banned imports of some Taiwanese goods amid escalating tensions. China last year banned imports of pineapples from the island, followed by some types of apples later that year, citing “pest control.” Earlier this year, it also banned Taiwanese grouper, a high-value seafood product from Taiwan, citing the detection of some banned drugs.
At a press conference on Wednesday, a Chinese Foreign Ministry spokesman said “the US and Taiwanese separatist forces must bear responsibility and pay the price for the mistakes they made.” His comments came after being asked if the latest export suspension is intended to punish Taiwan for Pelosi’s visit, to which he declined to answer directly, saying, “ask the relevant department in charge.” “.
The Communist Party will undergo a leadership shakeup at its 20th party congress this fall. President Xi Jinping is expected to seek a historic third term in office at the meeting.
Impact on global supply chains
Traders and analysts are concerned about an escalation in tensions between China and Taiwan and its impact on the global supply chain and inflation outlook.
Global markets slumped on Tuesday, with major stock indices closing in the red and safe-haven currencies rising. On Wednesday morning, Asian markets rallied a bit, but risk sentiment remains subdued.
“China’s response to Pelosi’s trip to Taiwan could have an impact on supply chains and demand, which could keep inflationary pressures strong,” Edward Moya, senior market strategist at Oanda, said on Wednesday.
Taiwan Semiconductor Manufacturing Company is the world’s largest contract chipmaker, playing a key role in supplying products designed by tech companies like Apple, Qualcomm and Nvidia.
Meanwhile, Eurasia Group analysts expected Beijing to stage an “unprecedented” show of military force across the Taiwan Strait, along with cyberattacks, economic sanctions and diplomatic protests.
“The immediate effect on customers will be a moderate but likely temporary disruption to supply chains traversing the waters around Taiwan, as planes and ships are diverted to avoid [People’s Liberation Army] exercises,” they said in a report on Wednesday.
“Lasting impact” will depend on the length and intensity of the episode, though at a minimum it will lead to increased planning and contingencies around supply chain disruptions, including for semiconductors, by companies and formulators. policy, they added.
“The potential crisis may not abate soon,” they said, adding that China could reveal more answers in the coming days, weeks and even months as the party’s 20th congress draws closer.
Simone McCarthy, Akanksha Sharma and Wayne Chang of CNN in Hong Kong contributed to this report.