Chinese trade bans on Taiwan risk ‘deeper predicament’ as Pelosi visit leaves geopolitics ‘on the mind’ of businesses

Applying more aggressive sanctions on Taiwan could undermine China’s reputation as a stable international trading partner, says expert

The European Union Chamber of Commerce in China says it was not in Beijing’s interest to alienate Taiwanese or American investors

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Beijing launched a barrage of trade suspensions on Taipei on Wednesday following the controversial visit of US House Speaker Nancy Pelosi. Photo: EPA-EFE

Published: 10:00pm, 4 Aug 2022Updated: 3:42pm, 8 Sep 2022

China should think twice before unleashing more economic weapons on Taiwan to avoid blowback that could leave it in a “deeper predicament”, experts and foreign business leaders say.

Beijing launched a barrage of trade suspensions on Taipei on Wednesday following the controversial visit of US House Speaker Nancy Pelosi, including export and import bans and sanctions on multiple organisations and companies for supporting “Taiwan independence”.

On Thursday, the PLA kicked off large-scale air and naval joint drills encircling Taiwan that will run until noon on Sunday, in an unprecedented war game by the mainland against the self-governed island.

Beijing regards Taiwan as a breakaway province that must be reunified with the mainland, by force if necessary.

Economic sanctions are likely to only put China in a deeper predicament

Guo Hai

But applying more aggressive economic action could compromise China’s political influence, which is derived from its reputation as a stable international trading partner, said Guo Hai, a research fellow at the Institute of Public Policy, an independent think tank based in Guangzhou.