Text: Xiao Yu
On August 1, the General Administration of Customs suddenly announced that more than 100 food manufacturers in Taiwan who have not completed the renewal of registration are prohibited from importing. On the 3rd, the relevant departments of the mainland issued another notice to suspend the export of natural sand to Taiwan, as well as the suspension of the import of citrus fruits, chilled white-banded fish and frozen horse mackerel from Taiwan into the mainland. As soon as this series of measures came out, it immediately caused heated discussion.
How big is the impact of such measures on the Taiwan region? Why is the mainland suspending the export and import of these products?
Let's start with the economy of the Taiwan region. It is reported that since the 1960s, the economy of Taiwan Province has been in the fast lane of development, and in the 1980s, it has gone further and entered the top 20 of the global economy. At that time, Taiwan, along with Hong Kong, Singapore and South Korea, was known as the "Four Asian Tigers" and was one of the fastest growing economies in Asia.
It was not until after entering the new century that its economic development gradually slowed down, and its growth rate was lower than that of the mainland. However, in the past two years of the epidemic, the global economy has been affected, and Taiwan's economy has not only not been greatly affected, but has benefited. The main reason behind this is that Taiwan Province is strategically located and electronic technology is very developed, especially the semiconductor industry, which is among the best in the world.
It is reported that in 2020, 2021 and the first half of 2022, the economy of Taiwan increased by 2.98%, 6.45%, and 3.11% respectively. Thanks to the shortage of global semiconductor demand, Taiwan Province has made great profits in recent years. From this aspect, it can be seen that Taiwan Province belongs to the export-oriented economy, and foreign trade has a great impact on its economy.
As we all know Chinese mainland is now the world's largest trading country, accounting for 14% of total global trade. In trade with most countries and regions, the mainland has maintained a surplus. Taking the past 2021 as an example, the total import and export volume of goods reached 391009 billion yuan, an increase of 21.4% over the previous year. Among them, exports 217348 billion yuan, an increase of 21.2%; Imports 173661 billion yuan, an increase of 21.5%. The trade surplus reached 4,368.7 billion yuan, setting a new record.
However, the trade between the mainland and Taiwan is to buy more and sell less, and there is a "deficit." In terms of data from the past three years, in 2019, the mainland imported 1,193.4 billion yuan from Taiwan, exported 380.1 billion yuan, and achieved a trade deficit of 818.3 billion yuan; In 2020, the mainland imported 1,386.2 billion yuan from Taiwan and exported 416.1 billion yuan, with a deficit of 970.1 billion yuan; In 2021, the mainland will import 1,614.5 billion yuan from Taiwan and export 506.2 billion yuan, with a deficit of 1,108.3 billion yuan.
Not only is it a long-term deficit, but it is also a long-term growth trend. It should be known that in the past 2021, the GDP of Taiwan was only 5 trillion yuan, which means that Taiwan Province earned one-fifth of its GDP in trade with the mainland, and Taiwan's dependence on the mainland's foreign trade is very high.
However, such a large trade deficit, in fact, not all of them are necessary for the mainland, and many of them are "sponsored". And even necessities can be found on such a large scale around the world. Take the citrus fruits and chilled white-banded fish mentioned above, which are not necessities.
First of all, there are many regions in the mainland that produce these products and are well supplied. Even if we want to import, we can buy from countries such as Southeast Asia. On the other hand, if we don't buy, it will be difficult for Taiwan to find alternative consumers. It is reported that last year, the proportion of relevant fresh exports to the mainland in Taiwan was: 86% of citrus, 50% of frozen horse mackerel, and 100% of white-banded fish.
For example, since last year, mainland customs have repeatedly detected quarantine pests from citrus fruits exported from the mainland from Taiwan. As a result, the mainland suspended the import of Fruits such as Pineapple, Shakya and Lotus Mist from Taiwan, resulting in a reduction of more than 90% in the annual performance of many fruit farmers. Among them, Taiwan's pineapple exports decreased by 90%, and mango and lotus mist decreased by nearly 50%.
In addition, Taiwan as an island is short of resources, and many things actually need to be purchased from the mainland. Continue to discuss the natural sand described above. Natural sand, as the name suggests, refers to rock particles formed by natural conditions (mainly rock weathering or washed by seawater), including river sand, quartz sand, sea sand and so on.
And natural sand is widely used. Mainly used in construction, concrete, cementitious materials, road construction materials, artificial marble, cement physical property testing materials (that is, cement standard sand) and so on. More than 90% of Taiwan's natural sand imports come from the mainland. Once the shortage of sand and gravel resources will certainly make the entire sand and gravel industry, construction industry and even the overall economic development of Taiwan region be greatly affected.
Some people may ask that Taiwan can't buy natural sand from elsewhere? It is also possible to import from Southeast Asian countries such as the Philippines. But there are many problems, and shipping from Southeast Asia has increased the distance several times and the cost is much higher. The most important point is that the quality of natural sand in these areas is not as good as that of the mainland. This is also the reason why the Taiwan region needs a large number of imports from the Eastern Continent.
However, on the whole, the mainland's share of purchasing Taiwan is heavier. As mentioned above, although Taiwan exports a lot of fruits and aquatic products to the mainland, if it is calculated by the amount of goods. The largest product exported from Taiwan to the mainland is still the trump card industry in Taiwan, integrated circuits.
Among The goods exported by Taiwan, integrated circuit exports account for more than one-third, and the largest destination for exports is the mainland, accounting for more than 40%. According to data from the General Administration of Customs, the import volume of integrated circuits in mainland China in 2021 will reach 432.55 billion US dollars, which is the single commodity with the largest import volume. Among them, the import volume from Taiwan reached 155.87 billion US dollars, accounting for 36%.
Of course, the Taiwan region has also earned a large trade surplus. Therefore, the mainland's integrated circuits against Taiwan are interdependent. At present, mainland chip manufacturing is mainly concentrated in low-end products, while high-end 7nm, 5nm, etc. are mainly concentrated in the hands of manufacturers such as TSMC and Samsung. Therefore, the semiconductor industry in Taiwan really deserves our vigilance.
However, with the mainland's support for the chip industry, semiconductor companies including Weier, SMIC, and Tsinghua Unigroup have also been born. And TSMC also has such a big competitor as Samsung, and Samsung is also eyeing the big market of Chinese mainland. Once the Taiwan region loses this market, it is difficult to find such a large market order for a while, but it has grown Samsung Electronics, which will also have a very big impact on itself.
Of course, for the mainland, we can only deal with all unfavorable factors if we get the chip together. However, at present, measures such as the suspension of imports of fruits and aquatic products, as well as the suspension of the export of natural sand, have had a considerable impact on the Taiwan region.