The Chinese Communist Party alleged that Taiwan‘s pineapples were infested with pests and banned imports, while the ROC government allocated funds to subsidize farmers.
The Chinese Communist Party uses trade as a weapon to play the old trick of “forcing politics through business” again
The Chinese Communist Party has once again used trade as a weapon. Recently, China alleged that Taiwan’s pineapples have pests and banned imports, and Australia will be the target of economic sanctions in 2020. In 2010, the Norwegian Nobel Committee awarded the Peace Prize to Liu Xiaobo, and China then alleged that the Norwegian salmon was suspected of being infected with a virus, extending the inspection process for Norwegian salmon and allowing the salmon to rot in customs. Economic sanctions are a common means of retaliation by the Chinese Communist Party, with no regard for the international norms of the WTO.
However, Australia and Canada have found other ways out from under the CCP’s trade knife, and China has even had to turn around and buy some of the products it sanctioned.
Jade Guan, a lecturer in strategy at Australia’s Deakin University, said Australia’s exports to China in 2020 will total $114 billion, down about 4 percent from $119 billion in 2019, according to the Australian Bureau of Statistics and China’s General Administration of Customs. She said:- “It’s not as pessimistic as expected, last year we were also thinking that Australia would be very affected by China’s economic sanctions, and then it turned out it was actually not as bad as we thought.”
Economic sanctions could backfire
Why has Australia not been seriously affected by China’s economic sanctions? China’s strong demand for iron ore and soaring prices is one of the key reasons, Jade Guan said, adding that China came out of the Epidemic in the second half of last year and demand for iron ore imports rose by 72 percent, and that Australia’s iron ore has always been of higher quality. As a result, the price of iron ore, from $90 per ton last January, has risen to $170 per ton now, an increase of nearly 200 percent.
In addition, China imposed anti-dumping and countervailing tariffs of 80.5% on Australian barley, but data from December last year showed that 88% of Australia’s cereal exports in December went to the Chinese market. Among them, China reduced barley imports from Australia, but Australia was fortunate to quickly find a replacement buyer, Saudi Arabia, so barley was not affected by the Chinese sanctions. And China’s wheat imports in December totaled A$25 million, accounting for one-third of Australia’s wheat exports in December. So in terms of iron ore and grains, Australia was not affected by the Chinese sanctions.
Jade Guan noted that beef, coal, seafood and wine were more affected. But Australia has found alternative buyers for coal mines, the biggest being Japan, India and South Korea. So Australia’s coal mines have not been drastically affected by China’s reduced imports.
Australia’s beef exports to China have fallen significantly, by 28 percent, and the countries to which Australia exported the most beef last year were Japan and South Korea, which Jade Guan said was related to the agreement in the U.S.-China trade talks that required China to import large quantities of U.S. cattle. So while many commentaries advocate that trade should be diversified and like-minded countries should cooperate, Western countries are in competition in the international marketplace and will not work together to contain Communist China in trade because they share the same values. Trade has its laws, democracies do not manipulate companies, companies have the freedom to do business with whom they want, and governments do not impose pressure. So the US-China trade agreement has allowed China to shift much of its buying market to the US instead.
The two industries most affected by China’s economic sanctions in Australia are seafood and wine.
Australia’s wine has failed to find alternative markets and exports have fallen by about 75 percent in 2020, with exports to China down about 14 percent, according to Australian Financial Insight.
Jade Guan said China has recently added an import ban, suspending imports of Australian grouper (Coral trout). With the ban on lobster and grouper, which are premium seafood ingredients, available at lower prices in Australia, Jade Guan said, “Australians are saying they can now afford to eat what used to be very high quality seafood.”
But Australia’s market of 25 million people is still too small compared to China’s market of 1.4 billion, and companies unable to find alternative buyers because of the sanctions still suffer significant losses.
Decline in Chinese investment in Australia may be linked to national security
Australia was subject to economic sanctions by the Chinese Communist Party last year, but strong Chinese demand for Australian iron ore has sent iron ore prices soaring.
In terms of foreign investment in Australia, Reuters recently reported that Chinese investment in Australia fell 61 percent in 2020.
Jade Guan points out that the decline in Chinese investment in Australia did not just start last year. If you look at the data analyzed by KPMG KPMG Australia, Chinese investment in Australia has already dropped in 2019, from A$8.2 billion in 2018 to A$3.4 billion, a 62.2% drop if settled in US dollars.
Jade Guan believes this has a lot to do with the Australian government’s increased scrutiny of investment from China in recent years due to national security concerns. Last December, Australia passed the Foreign Investment Act, which gives the federal government the power to review and override cooperation agreements between state governments and foreign governments. The bill was publicly discussed and prepared long before it was passed, mainly because of concerns about the impact of Chinese investment projects on national security, such as China’s 99-year lease of the Port of Darwin and the signing of the Belt and Road Memorandum between Victoria and the Chinese Communist Party. The deterioration of political relations between China and Australia coupled with the strict review of Chinese investment projects in Australia have affected the inflow of funds from the Chinese side to Australia.
Jade Guan pointed out that according to the Australian Bureau of Statistics, China has not been a major source of inward investment in Australia, with China plus Hong Kong investment in Australia accounting for only 5% of total inward investment in Australia in 2019, while investment from the United States and Europe was close to 60%. The sharp decline in Chinese investment in Australia cannot be directly linked to China’s punishment of Australia, as it is itself a very low percentage of total investment, and the impact of Australian domestic politics must also be considered. The more obvious penalties are the significant tariff increases on barley and wine on anti-dumping and anti-government subsidy grounds, and the suspension of imports of Australian coal, seafood and some other agricultural products.
However, Jade Guan argues that economic sanctions have historically had limited effectiveness, and that China’s economic containment measures against the Philippines, South Korea and Japan have had limited effect, releasing some pressure and then changing the policy wind. On the contrary, they sometimes have a countervailing effect on the sanctioned party, as civil opinion of the sanctioned or coerced party often turns negative, and the sanctioned country is able to use it for domestic mobilization to enhance cohesion.
China Sanctions Canadian Canola, Then Turns Back to Buying
China banned Canadian canola imports in 2019, but later bought super from Canada after desperately needing canola for pig feed in the wake of swine fever. The picture shows a canola field in Canada.
In contrast to its high-profile retaliation against Australia, the Chinese Communist Party has made excuses for its means of imposing trade sanctions on Canada. Shen Rongqin, an associate professor at York University in Canada, said China offered economic sanctions against Canada in both 2016 and 2019, banning Canadian canola imports into China. Canola is one of Canada’s most important agricultural products, and Canada is the world’s largest producer and exporter of canola, while China is its largest export market, accounting for 40 percent of total exports.
Shen Rongqin said that in 2016 China allegedly found pests in Canadian canola and demanded that the “impurities” in Canadian canola be reduced from 2.5 per cent to 1 per cent. This is absurd, because no country in the world can meet this standard for impurities in canola. There was no political conflict between China and Canada back then, but China had a bumper crop of canola that year. The Chinese Communist Party demanded that Canadian canola impurities be reduced to 1% for Canada to confirm as an excuse. The ban was only lifted later through a meeting between the prime ministers of the two countries, and the Chinese Communist Party used this business as a political operation from beginning to end.
In 2018 huawei Princess Meng Wanzhou was arrested at Vancouver airport in Canada, and the CCP subsequently arrested two Canadian citizens, Kang Mingkai and Michael. 2019 the CCP again allegedly banned imports of Canadian canola because of pests, causing a major blow to Canada’s canola industry, and Canada went to the WTO to sue China; but China was also affected and had to buy lower quality products at a higher price to make In April 2020, China recognized that it could not force Canada to release Meng Wanzhou by banning canola, but also because China recovered from the African swine fever cull and needed to rebuild the number of pigs, the demand for feed increased greatly, and it urgently needed canola from Canada as feed, so China quietly lifted the ban and overbought through other importers at a higher price, resulting in an increase of 33% last year even though Canadian rapeseed exports have increased by 33% last year, still in short supply, making international feed prices soar, rapeseed prices reached a new high in 13 years.
However, Taiwan’s pineapple and Canadian canola or Australian iron ore sand fate is different, Shen Rongqin said Taiwan’s small scale of agriculture, no production cost advantages, when the Chinese Communist Party to force politics, pineapple appears very vulnerable.
Although the ban on the import of pineapples to Taiwan’s economic losses are limited, but will not be like the Global Times said “left the DPP authorities to do a series of Nightmares” implied, the next may be banned other agricultural products, industrial products to China, remains to be seen. But Shen Rongqin think to go to the cross-strait decoupling that step, the odds are not big, this Time on Taiwan pineapple knife is a test nature, is to give Taiwan a little color to see.
Wang Hao: pineapple ban is the Chinese Communist Party moving stones to smash their own feet
China reduced barley imports from Australia, but Australia was lucky to find a replacement buyer in Saudi Arabia soon, so barley was not affected by the Chinese Communist Party sanctions.
Wang Hao, a long-time observer of international relations and China’s political situation, said that the CCP’s economic sanctions are nothing new, and the CCP is used to using economic means to achieve political goals. When the unification war was introduced, various policies such as concessions to Taiwan and attracting Taiwanese investment were introduced, and when it was time to crack down, various crackdown policies were implemented, such as the ban on pineapples and the stoppage of mainland visitors, all of which show that the CCP’s economic actions such as investment and trade are political actions and have political purposes.
Wang Hao said the ban on pineapples is also intended to crack down on Tsai Ing-wen’s government, in preparation for Taiwan’s county mayoral elections next year. Taiwan’s epidemic prevention success, economic stability, the stock market is good, Tsai Ing-wen polls remain high, the Chinese Communist Party took this opportunity to suppress Tsai Ing-wen polls, hit the south-central farmers and DPP stronghold. However, the ban on pineapples has caused a backlash in Taiwan, is to move a stone to smash their own feet, Taiwan society contributed money to help farmers to form a social movement, public opinion lopsidedly support the farmers, the State Administration of Taiwan miscalculated. And this tactic, Taiwan people have not seen strange, the Chinese Communist Party’s old tricks can not achieve the purpose, but to help the reverse, to help Tsai Ing-wen to raise the polls, to help rally support within Taiwan. This tactic makes people feel very nasty, and has absolutely no effect on the hearts and minds of the people of Taiwan, and Taiwan society is becoming more and more immune to this tactic of the Chinese Communist Party.
The Chinese Communist Party’s offensive U.S. defensive position Biden is in a passive position
Xi Jinping‘s actions have forced Biden to maintain Trump‘s hard-line policy toward the CCP, and the most important point of observation in the coming period is the internal politics of China.
How to observe the next Sino-US relations?
Wang Hao said it mainly depends on the Chinese government, the Chinese Communist Party is now on the offensive, the United States on the defensive, Biden is passive, Biden’s attitude toward China has not changed much so far, the U.S.-China trade war and Huawei ban, etc., still continue Trump’s policy. China-US relations depend on Xi Jinping’s attitude, Hong Kong arrested 47 pro-democracy activists, to Taiwan, the newly appointed head of the Land Commission Qiu Taizan issued the expectation of the spring blossoms across the Taiwan Strait, but Beijing moved the pineapple ban, knocking out Taiwan’s expectations of trying to ease the cross-strait atmosphere. Beijing’s attitude toward Xinjiang remains even tougher.
Wang Hao said that Xi Jinping’s actions forced Biden to maintain Trump’s tough policy toward China, the most important point of observation in the coming period is the internal politics of China, for Xi Jinping, how Biden’s policy change is not too important, the next year or so, Xi Jinping will find ways to continue to re-election in the Communist Party’s 20th Congress for Life, so that the Standing Committee are retired, by his own appointment of completely obedient people, he wants to change Deng Xiaoping This is the most important political issue for Xi Jinping in the coming year.
This is the most important political issue for Xi Jinping in the coming year. It is more urgent and important for Xi Jinping to deal with internal issues next. Wang Hao said that externally he will continue his war-wolf diplomacy to legitimize his totalitarian approach internally and to maintain some tension in external relations to consolidate his totalitarian dictatorship. And Xi’s continued tense, adventurous, and challenging diplomatic attitude toward countries will force the Biden Administration to maintain the Trump line. Because no matter the relationship between China and the U.S. or Taiwan and the U.S., one slap on the wrist will not make a difference, and each side will take a step back before improvement is possible. But Xi Jinping has not softened his stance at all in the past two months. With Taiwan and the U.S., if Xi Jinping does not lower his stance in any way, the other side cannot improve relations with you.
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