China issues ban on Taiwanese food imports, TAIEX slumps ahead of Pelosi visit

China slapped a ban on more than 100 Taiwanese food manufacturers late last night, affecting potentially up to around 3,000 products, ahead of the expected visit of US House of Representatives Speaker Nancy Pelosi later today, August 2.

The General Administration of Customs of China made a surprise announcement late last night shortly after it became apparent that Pelosi would visit Taiwan, despite the country not being mentioned on the official itinerary of her Asian tour.

Chinese customs authorities  cited the official reason for the suspension as related to the Taiwanese companies’ compliance with a new customs registration system which Chinese authorities introduced in April of last year. However, the move is being interpreted as punishment in retaliation for the highest-level visit by a member of the US government in 25 years.

The economic harm of the bans on Taiwan’s food industry could be felt immediately, General Chamber of Commerce Chairman Hsu Shu-bo said today.

“China suddenly announced a ban on the import of products from Taiwan’s food factories late last night, and is even considering further restrictions on agricultural and fishery products, so that Taiwan’s food industry and the vast number of farmers and fishermen suddenly became innocent “victims of international political struggle,” Hsu said.

Hsu stressed that peace and stability across the Taiwan Strait and the Asia-Pacific region is the cornerstone of Taiwan’s economic development. He also hoped that the leaders of both sides of the Taiwan Strait would use great wisdom to deal with political and economic issues based on the happiness of the people on both sides of the strait, so that the economic and trade between the two sides of the strait could return to normal as soon as possible.

Taiwan’s Council of Agriculture has confirmed that the blacklisted companies include producers of tea leaves, dried fruits, honey, cocoa beans and vegetables, as well as products from around 700 fishing vessels. COA said it learned of the import suspensions on Monday, and was still working to determine how many companies had been affected.

Stocks slumped across the region amid the tensions. China’s Shanghai Composite Index closed down 2.26% today, while the Shenzhen Composite Index fell 2.37%. Hong Kong’s Hang Seng Index fell 2.33% as of around 3:04 pm. Taiwan’s TAIEX closed down 1.56% at 14,747.23 points; Japan’s Nikkei fell 1.42%; South Korean stocks fell 0.50%.

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