Taiwan govt protests against China’s plan to extend suspension of preferential tariff rates

Taiwan’s government has protested against China’s announcement of a plan to extend its suspension of preferential tariff rates for Taiwanese imports that had been part of a bilateral trade deal, with effect from June 15, Central News Agency (CNA) reported.

While delivering remarks at the legislature, Chiu Chui-Cheng, Taiwan’s head of the Mainland Affairs Council (MAC) said Taipei “strongly protested and expressed its dissatisfaction with” Beijing’s decision to further suspend tariff concessions on 134 Taiwanese products under the Economic Cooperation Framework Agreement (ECFA).

Chiu Chui-Cheng termed China’s move “unilateral” and not in line with the World Trade Organization’s regulations. He said that China’s unilateral decision was intended as a “political manoeuvre” aimed at “exerting pressure on Taiwan,” according to CNA report.

Chinese Ministry of Finance’s announcement will impact 134 items that are made in Taiwan, including base oils for lubricants, racing bicycles and textile products.

Earlier in December 2023, China terminated favourable import duties on 12 Taiwanese products, including propylene, paraxylene, and other petrochemicals, Central News Agency (CNA) reported.

Earlier this month, China announced a series of proposals that target Taiwan’s Matsu Islands, also known as Lienchiang County, for economic integration and to establish greater political influence over the island nation, reported Taiwan News.

The Taiwanese authorities have identified these measures as a threat to national security. As an outlying territory so close to China, Beijing hopes that economic links can be used to coerce the local government and population of the county to willingly accept the Chinese administration.

The 10-point plan aims at increasing shipping and investment between Fuzhou and the Matsu Islands, which are about 20 km apart. The proposals would allow Matsu residents discounted rides on transportation and hotels in Fuzhou, free tours of Fuzhou’s major cultural attractions, housing benefits, and dedicated hotline consultation for children’s education, employment, and entrepreneurship.

China also plans to have an industrial cooperation zone that will make it easier for Taiwanese citizens in Matsu to establish businesses in Fujian. In addition, China has pledged USD 1.38 billion each year to promote business links and offer Matsu residents the same property rights as Chinese citizens, reported Taiwan News.

Fuzhou aims to attract young Matsu residents with educational exchange opportunities and entice travellers with incentives related to tours and accommodations like Fuzhou-Matsu city passes announced in February.

The Chinese authorities are also planning to create a cross-strait distribution centre in Fuzhou with an annual budget of USD 5.5 million to facilitate increased trade, shipping, and economic exchanges with Lienchiang County.

China aims to use trade and finance strategies along with infrastructure projects to annex Taiwan’s outlying territories of Kinmen and Matsu initially, to be followed by Penghu and then the main island of Taiwan, according to Taiwan News. Recently, Taiwan’s authorities have raised concerns about China’s efforts to target Lienchiang County.