Taiwan’s government protests against China’s plans to extend the suspension of preferential tariffs

The Taiwanese government has protested against China’s announcement to extend the suspension of preferential tariffs on Taiwanese imports, which were part of a bilateral trade agreement, effective June 15, the Central News Agency (CNA) reported.

In his speech to Parliament, Chiu Chui-Cheng, Taiwan’s chairman of the Mainland Affairs Council (MAC), said Taipei had “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 called China’s action “unilateral” and not in line with World Trade Organization rules. He said China’s unilateral decision was intended as a “political maneuver” aimed at “putting pressure on Taiwan,” according to a CNA report.

The announcement by China’s Ministry of Finance will affect 134 items made in Taiwan, including base oils for lubricants, racing bicycles and textile products.

As early as December 2023, China lifted favorable import tariffs on twelve Taiwanese products, including propylene, paraxylene and other petrochemicals, the Central News Agency (CNA) reported.

Earlier this month, China announced a series of proposals targeting Taiwan’s Matsu Islands, also known as Lienchiang County, in a bid to integrate them economically and exert greater political influence over the island nation, Taiwan News reported.

Taiwanese authorities see these measures as a threat to national security. Since Taiwan is a remote territory in close proximity to China, Beijing hopes that economic ties can be used to force the country’s local government and population to voluntarily accept the Chinese government.

The 10-point plan aims to increase shipping traffic and investment between Fuzhou and the Matsu Islands, which are about 20 km apart. The proposals would provide Matsu residents with discounted travel on public transport and hotels in Fuzhou, free tours of Fuzhou’s major cultural attractions, housing subsidies and a dedicated hotline advice service for their children’s education, employment and entrepreneurship.

China also plans to set up an industrial cooperation zone that will make it easier for Taiwanese citizens in Matsu to set up businesses in Fujian. In addition, China has pledged to provide $1.38 billion each year to promote business ties and give Matsu residents the same property rights as Chinese citizens, Taiwan News reported.

Fuzhou wants to attract young Matsu residents with educational exchange opportunities and entice travelers with tour and accommodation incentives, such as the Fuzhou-Matsu City Passes announced in February.

The Chinese authorities also plan to set up a distribution center in Fuzhou with an annual budget of US$5.5 million to promote trade, shipping and economic exchanges with Lienchiang County.

China plans to use trade and financial strategies as well as infrastructure projects to first annex Taiwan’s outlying territories of Kinmen and Matsu, followed by Penghu and finally the main island of Taiwan, Taiwan News reports. Taiwan authorities have recently expressed concerns about China’s efforts to target Lienchiang County.