China has ordered ships and planes to avoid military exercises surrounding Taiwan, which the mainland’s ruling Communist Party claims is part of its territory. Hong Kong newspaper The South China Morning Post called the exercises “an effective blockade of Taiwan”. Beijing announced “live-fire drills” after House Speaker Nancy Pelosi arrived on Tuesday for a one-day visit, defying Beijing’s warnings. It earlier banned imports of hundreds of Taiwanese foods, including fish, fruit and biscuits.
Read more: China lashes out at Pelosi’s visit, but experts say Taiwanese are ‘thrilled’
Story continues below ad The two sides, separated in 1949 after a civil war, have no formal ties but one of the busiest technology and manufacturing relationships in the world. Taiwanese companies are bracing for Chinese shows of force and possible trade disruptions beyond the four days Beijing says the exercises will last, said Natixis CIB economist Alicia Garcia Herrero, who was meeting businesspeople in the island’s capital , Taipei. “They start thinking about solutions, rerouting, delaying orders until they have more clarity,” Garcia Herrero said. “I think people are realizing that this is not just a four-day event.” 4:19 Taiwan criticizes Chinese military drills and cyber attacks while Beijing denies wrongdoing after Pelosi trip On Thursday, at least 40 flights to and from Taiwan were canceled, according to the China Times newspaper. Taoyuan Airport in the capital, Taipei, said the cancellations were “not necessarily related” to the military exercises. Story continues below ad There was no immediate indication of the potential impact on shipping, which has the potential to shake the global economy. Taiwan produces more than half of the processor chips used in smartphones, cars, tablet computers and other electronics. Chip sales at Chinese factories that assemble most of the world’s consumer electronics rose 24.4 percent last year to $104.3 billion. Trending Stories
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Read more: Canada calls on China to de-escalate as tensions rise over Pelosi’s visit to Taiwan
Any significant disruption would “send a shock to global industries,” Rajiv Biswas of S&P Global Market Intelligence said in an email. That could push up already high inflation in the United States and Europe in the same way that prices soared after the 2020-21 shipping was suspended by the coronavirus, Garcia Herrero said. “If the ports cannot function normally, we can see the consequences,” he said. The ruling party’s military wing, the People’s Liberation Army, said it carried out “precision missile strikes” in the 100-mile-wide (160-kilometer) Taiwan Strait that separates the island from the mainland, but gave no details on the location. 2:23 Taiwanese scholars weigh impact of Pelosi’s visit Taiwanese scholars weigh impact of Pelosi’s visit Taiwan’s defense ministry said it observed the launch of missiles in waters northeast and southwest of the island. Story continues below ad China’s foreign ministry rejected suggestions the drills were dangerous and said the United States was to blame for the tension. “China’s practice is in line with international law,” ministry spokeswoman Hua Chunying said.
Read more: US will stand by Taiwan, Pelosi says during visit as China protests
Washington has no formal ties to Taiwan, but maintains extensive informal ties and is bound by federal law to ensure the island has the means to defend itself. Pelosi was the highest-ranking elected US official to visit the island since then-Speaker Newt Gingrich in 1997. Chinese President Xi Jinping’s government accuses Washington of backing Taiwan’s formal independence, a step Beijing says will lead to war. President Joe Biden’s administration says it does not support independence but wants the dispute resolved peacefully. Some flights to the mainland would be diverted via Hong Kong. Taiwan’s Transport Minister Wang Kwo-tsai said at a press conference on Wednesday. 1:20 China to conduct ‘joint military operations’ as Pelosi lands in Taiwan, state media says China to conduct ‘joint military operations’ as Pelosi lands in Taiwan, state media says Trade between the two sides has increased even as Xi’s government has stepped up pressure, sending increasing numbers of fighter jets and bombers to fly around Taiwan to intimidate its government. Story continues below ad Two-way trade rose 26 percent last year to $328.3 billion. Taiwan said chip sales to Chinese factories rose 24.4 percent to $104.3 billion. Fruit, fish and other foodstuffs make up a small part of Taiwan’s exports to China, but the ban hurts areas seen as supporters of President Tsai Ing-wen. Beijing has used import bans on bananas, wine, coal and other goods as leverage in disputes with Australia, the Philippines and other governments. © 2022 The Canadian Press
