China has blocked imports of citrus fruits and frozen mackerel from Taiwan in retaliation for visit to the island by Speaker of the US House of Representatives Nancy Pelosibut avoided an interruption in the supply of microchips, which would provoke a “shock” in an already unstable world economy, writes AR.
Beijing also announced a four-day military exercise with artillery firing in the waters around Taiwan. This may result in a delay or interruption in shipping to and from the island, one of the world’s largest merchants.
The potential disruption exacerbates worries about weakening global economic growth, but Asian stock markets rose on Wednesday after there were no immediate signs of Chinese military action.
The Communist Party says Pelosi’s visit could encourage Taiwan to officially declare its decades-long independence. Beijing says it will lead to war.
The administration of US President Joe Biden tried to tone down the visit by insisting that America’s long-standing “one-China policy” of recognizing Beijing but allowing informal relations and defense ties with Taipei would not change.
Meeting with leaders in Taiwan, Pelosi said she and other members of Congress will not abandon their commitment to a self-governing island.
“America’s resolve to preserve democracy here in Taiwan and around the world remains unwavering,” Pelosi said in a short speech during a meeting with Taiwan’s President Tsai Ing-wen.
The two countries, which parted ways in 1949 after a civil war, have no formal relationship other than multibillion-dollar business ties, especially in the flood of Taiwanese-made processor chips needed by Chinese factories that assemble smartphones and other electronics. They built this business while Beijing, under the leadership of the Communist Party, threatened to attack the island nation for decades.
Last year, bilateral trade grew by 26% to $328.3 billion. Taiwan, which makes half the world’s processors and has technology that the mainland can’t match, said sales to Chinese factories rose 24.4% to $104.3 billion.
“The global economy cannot function without chips made either in Taiwan or China,” High-Frequency Economics, a US analyst firm, said in a report.
Director of the World Policy Institute Evgeny Magda believes that due to strong economic ties and competition there will be no war between the US and China. “It is hard to imagine that China would go into armed conflict with the state with which it has the strongest economic relations. China and the United States are actively competing economically. So it is difficult to imagine that these two states will fight,” the expert explained.