China has taken the step of suspending tax concessions on 12 chemical compound imports from Taiwan, citing what it perceives as a breach of a trade agreement. This move comes just weeks ahead of crucial elections in the democratically-run island.
The Chinese Finance Ministry stated, “Taiwan has unilaterally adopted discriminatory bans, restrictions, and other measures on the export of mainland products, violating the provisions of the Cross-Strait Economic Cooperation Framework Agreement.”
The Chinese Commerce Ministry had previously accused Taiwan of violating World Trade Organization rules and the terms of a 2010 trade accord between the two parties. The probe into Taiwan’s alleged trade restrictions with the mainland has been extended to January 12, coincidentally just a day before the island’s presidential and parliamentary elections.
Taiwan’s Democratic Progressive Party-led government has frequently accused Beijing of interfering in the elections, either through military intimidation or by exerting influence over Taiwan’s business elite, given their economic ties with China.
China has maintained its claim over Taiwan, a self-governing entity since 1949 when the Chinese nationalist party, Kuomintang, retreated to the island after losing the Chinese civil war.
China’s recent increase in military activity in the Taiwan Strait and nearby waters has further heightened tensions.
Observers suggest that China’s timing in launching this probe appears to have political rather than economic motivations. Lin Tze-luen, a spokesperson for Taiwan’s legislative Executive Yuan, noted that the investigation process by China lacked transparency.
China’s announcement implies that chemical compounds, including vinyl chloride, dodecylbenzene, and primary forms of ethylene propylene copolymer, will now be subject to tariffs starting on January 1.
This development occurs as Taiwanese companies, including major semiconductor manufacturers, are diversifying their presence in the mainland and reducing their economic dependence on China, partly due to Washington’s trade tensions with Beijing in the semiconductor industry.
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