Taiwan government opposes China's plan to extend suspension of preferential tariff rates

Ronit Kawale
Ronit Kawale - Senior Editor
3 Min Read

The Taiwan government has protested against China's announcement of plans to extend beyond June 15 the suspension of preferential tariff rates for Taiwanese imports, which was part of a bilateral trade agreement, reports the Central News Agency (CNA).

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In his statement to the legislature, Chiu Chui-cheng, head of Taiwan's Mainland Affairs Council (MAC), said Taipei “strongly opposes and expresses its displeasure” to Beijing's decision to suspend tariff concessions on 134 Taiwanese products under the Economic Cooperation Framework Agreement (ECFA).

Chiu Chui-cheng described China's move as “unilateral” and said it was not in line with WTO rules. He said China's unilateral decision was a “political move” aimed at “putting pressure on Taiwan,” CNA reported.

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

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

Earlier this month, China announced a number of proposals to economically integrate Taiwan's Matsu Islands (also known as Lienchiang County) and exert greater political influence on the island nation, Taiwan News reported.

Taiwanese authorities view these measures as a threat to national security. As an outlying territory so close to China, Beijing hopes to use economic ties to force the local government and the country's population to voluntarily accept Chinese administration.

The 10-point plan aims to boost shipping and investment between Fuzhou and the Matsu Islands, which are about 20 km apart. Matsu residents will get discounted rides on transport and hotels in Fuzhou, free visits to Fuzhou's major cultural attractions, housing benefits and dedicated hotline counselling on children's education, employment and entrepreneurship, the proposals say.

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

Fuzhou aims to attract young Matsu residents with educational exchange opportunities and entice travelers with tourism and accommodation incentives such as the Fuzhou-Matsu City Pass announced in February.

Chinese authorities also plan to build a cross-strait distribution center in Fuzhou with an annual budget of US$5.5 million to boost trade, shipping and economic exchanges with Lienchiang County.

According to Taiwan News, China aims to use infrastructure projects as well as trade and financial strategies to take over Taiwan's outlying regions of Kinmen and Matsu, then Penghu, and then Taiwan's main island. Recently, Taiwanese officials have raised concerns about China's attempts to target Lienchiang County.

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