Authors: Jade Yong Yu Jia, Khadijah Syahidah Pinardi
Research Head: Jade Yong Yu Jia
Editors: Sasthaa Gingee Babu (Uday)
Beijing abruptly announced that they would start banning Taiwan’s pineapple from its market due to biosecurity reasons per 1 March 2021. This new regulation applied heavily impacted Taiwan, a country that exported more than 90% of its Pineapple harvest to China. This paper explores China's current ban on Taiwan pineapples, Taiwan and other countries’ responses, and lessons Taiwan can take from the incident.
The Pineapple Ban
China has once again added another arsenal in its incessant political and economic campaigns against Taiwan. On 1st March 2021, China announced a ban on Taiwan’s pineapples. Aside from sparking several questions centred around Taiwan’s economic dependence on its political nemesis, a key question in this episode remains - why Pineapples specifically?
China has justified the Pineapple Ban on the basis of finding pests in some of the fruit in 2020 (Watt, 2021). However, this raises doubts given that 99.79% of Taiwan’s pineapples passed China’s customs tests in the same year. According to a public policy expert Drew Thompson, the singular targeting of pineapples instead of all agricultural products or exports reflects a political signal aimed at alienating Taiwan’s farmers and hardening public opinion against the Taiwanese government.
President Tsai Ing-wen, and Taiwan authorities have encouraged people to buy pineapples to ensure that farmers will not suffer from the new ban imposed by China. The authorities provided assurance that China’s ban on Taiwan’s Pineapples will not severely impact local farmers. Although China accounts for more than 95% of Taiwan’s pineapple exports, it only accounted for about 12% of total Taiwanese pineapple production (Chung, 2021). In addition, the government also promised to offer $36 million to help local farmers get through the challenges they are facing (Chung, 2021).
Beyond the Pineapple Shell - What China is really after
Just weeks after the Pineapple Ban, China’s Taiwan Affairs Office (TAO) unveiled 22 incentives to promote Taiwanese investments in Chinese agriculture (Chin, 2021). According to state news agency Xinhua, the incentives offered by China include financing research and development and providing Taiwanese farmers access to lands (Lau & Chung, 2021).
However, Taiwanese farmers are not convinced by these sweet incentives. They are skeptical due to how Taiwanese who have invested in China were given lands with poor quality instead. A Taiwanese businessman also cites how investors lost all of their advantages, having their skills mastered by Chinese farmers, and only a few of them have survived (Lau & Chung, 2021).
One hypothesis for China’s agricultural aggressiveness against Taiwan centres on economic threats posed by the latter’s growing agricultural sector. In 2018, China’s top agricultural exports were Aquatic Products, Vegetables and Fresh and Dried fruits (Statista, 2021). These very same categories appeared in Taiwan’s top export list in 2018, notably with fresh fruits experiencing exponential growth in demand by 29.5% from the previous year (Taiwan Today, 2021). Overall, Taiwan’s agricultural exports hit a two-decade high of US$5.47 billion in 2018. Therefore, China’s agricultural bans, coupled with incentives to increase investments in its own agricultural sector, could point towards intentions of sabotaging the growth of Taiwanese agricultural export sector. Given that it has commonly cited pests and health-related issues as justifications for the bans, this could be an attempt to reduce consumer confidence in Taiwan’s crops.
In the grand scheme of things, a pertinent question lies upon whether Taiwan could do without China for trade exports in general. Since the 1990s, Taiwan has been economically dependent on China (Lin, 2021). Accounting for approximately 25% of Taiwan’s exports in 2018, China is undoubtedly one of the country’s largest trading partners. In contrast, Taiwan only accounts for 5% of China’s exports, illustrating the unequal economic interdependence.
Taiwan’s sustained dependence on China could be attributed to the sheer vastness of its consumer market and the undeniable cultural similarities which has promoted demand homogeneity between both countries. Therefore, both countries serve as perfectly complementary demand markets to one another. Furthermore, the World Bank projects that China’s economy would grow by 8% this year, and as the only major economy to have successfully rebounded from the pandemic, Taiwan would still have to leverage upon China’s strong consumer demand (Lin 2021).
A Blessing in Disguise
In response to the Pineapple Ban, several countries have expressed their support for Taiwan. Countries such as the United States and Canada whose relations with China are riddled with disputes expressed steadfast solidarity with Taiwan, explicitly promoting its pineapples with hashtags like #pineapplesolidarity (Channel News Asia, 2021). Even neighbouring countries uninvolved in the political dispute showed support for Taiwan, such as Japan which ordered 5 times more than the amount they imported in 2020.
Nevertheless, this episode highlights the critical need for Taiwan to diversify its commercial and trading relationships especially since China has long used Taiwan’s economic dependence for political leverage. Aside from the negative economic repercussions engendered by the pandemic, the pandemic provides an opportune time for Taiwan to do so. Amidst weak global economic performance, Taiwan experienced a record surge in exports due to rising demand for its technological products and components (Lin, 2021). This is partly attributed to work-from-home and virtual schooling arrangements. In addition, worsening US-China relations reduced competitive advantages from both countries, facilitating the emergence of Taiwan as a powerhouse in the semiconductor industry. The country’s GDP is forecasted to grow by 4.64% in 2021, its fastest pace in 7 years (Reuters, 2021). Therefore, Taiwan should capitalise on strong global demand for its products to develop steady export destinations. Meant to be a hindrance to Taiwan’s economic growth, China’s import restrictions might have served as a catalyst for the globalisation of Taiwan’s trade instead.
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