China imposed economic sanctions on Taiwan in response to U.S. House Speaker Nancy Pelosi’s controversial visit to the island.
On Wednesday, China’s Ministry of Commerce announced that Beijing would halt exports of natural sand to the country, the state-run Xinhua News Agency reported. Natural sand is a crucial ingredient for Taiwan’s semiconductor industry.
In addition to the export restrictions, China suspended imports of citrus fruits — including grapefruits, lemons and oranges — and fish products from Taiwan, China’s Taiwan Affairs Office said.
Chinese authorities cited “excessive pesticide residues” and COVID-19 as reasons for the import restrictions, according to CNN.
“Nancy Pelosi’s visit to Taiwan has triggered the expected ire of Chinese authorities,” ING Group analysts said.
Taiwanese authorities, however, dismissed China’s export suspensions as having only a limited effect on its industry, adding that less than 1 percent of Taiwanese natural sand comes from China.
In response to Pelosi’s visit, China also announced military exercises starting Thursday in the South China Sea near Taiwanese territory. Pelosi departed the country on Wednesday.
The exercises will involve “training, conducting long-range live ammunition firing in the Taiwan Strait, and organizing regular-guided fire testing in the eastern waters of Taiwan Island,” said People’s Liberation Army Eastern Theater Command spokesman Senior Col. Shi Yi, according to Newsweek.
“This action is targeted at the U.S.’ shocking recent major escalation on the Taiwan issue,” he added, “and serves as a serious warning to ‘Taiwan independence’ forces or those seeking ‘independence.’”
“China’s response to Pelosi’s trip to Taiwan could have an impact on supply chains and demand, which could keep the inflationary pressures going strong,” said Edward Moya, senior market strategist for Oanda.
“The immediate effect on clients will be a moderate but likely temporary disruption of supply chains that traverse the waters around Taiwan, as planes and ships reroute to avoid [People’s Liberation Army] exercises,” Eurasia Group analysts said in a Wednesday report, according to CNN.
“The potential for crisis may not abate soon,” the analysts said.
Speaking to CNN, former U.S. Navy captain and former director of operations at the U.S. Pacific Command’s Joint Intelligence Center Carl Schuster added that China has “gone a lot farther than they ever have before.”
“The geopolitical signal being sent is that China can close Taiwan’s air and sea access whenever it wants,” Schuster said.
Taiwan, however, remained defiant of Beijing’s threats. Taiwan’s Ministry of Defense said Wednesday that the nation is “resolved to uphold our sovereignty, liberty and democracy. We are not eager for a fight, nor will we shy away from one.”
“Beijing [does not] want to escalate things in a way it cannot control. At the same time, it cannot send a signal that looks too weak,” National University of Singapore political scientist Chong Ja Ian told CNN.
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