First pineapples, now fish: To put pressure on Taiwan, China is easing its economy

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FANGLIAO, Taiwan — Lin Chun-lai purchased his grouper farm in southern Taiwan about a decade ago in recognition of mainland China’s growing appetite for live fish. In just a few years, the former electrician made enough money to support his family of four and even open a small inn.

Then China abruptly banned all grouper imports from the island, in an apparent attempt to turn the economic screws on Taiwan, a self-governing island that Beijing claims as its own territory. The move cut off Mr Lin and other farmers like him from their main market, putting their livelihoods at risk and dealing a blow to a lucrative industry.

“If I don’t raise groupers, what else can I do to live? Mr Lin said one recent morning as he stood on a low concrete wall overlooking the 2.5 acres of water, divided into ponds, in which he raises more than 70,000 fish. The groupers were ready to harvest, but since the ban came into force a week ago he hasn’t received any orders from fishmongers who would normally call at this time of year.

Chinese customs officials said they found banned chemicals and excessive levels of other drugs in grouper recently imported from Taiwan. Taiwan officials pushed back, arguing the ban was politically motivated. The island’s president, Tsai Ing-wen, has pledged to help grouper farmers.

Chinese leader Xi Jinping has said Taiwan’s unification with China is inevitable, but most of Taiwan’s 23 million people favor maintaining the island’s de facto independence. As Beijing has stepped up pressure on the island, Taiwan has moved to strengthen economic and diplomatic ties with more friendly countries, including the United States, those in the European Union and Japan.

In recent years, Beijing has sent military planes to the island almost daily. He tried to isolate Taiwan, getting rid of its few remaining diplomatic allies and preventing it from joining international organizations. It has also increasingly sought to restrict the island’s access to China’s vast consumer market, banning Taiwanese pineapples and then wax apples last year after saying the fruit brought parasites.

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Taiwan has sometimes been able to mitigate the impact of such measures. The public quickly mobilized to support the island’s pineapple producers. Restaurants rushed to showcase menus featuring pineapple-centric culinary creations, politicians posted photos of themselves eating ‘freedom pineapples’ on social media and government departments encouraged officials to eat more prickly fruit. Countries like Japan have stepped in to help fill the gap by increasing their imports of pineapples from the island.

“Thanks to the support of the Taiwanese people, our business has flourished even more than before,” said Hsieh Kun-sung, 61, a pineapple farmer in the southern city of Kaohsiung.

But for grouper farmers in Taiwan, moving away from the Chinese market may not be so easy. Last year, 91% of grouper exports, worth more than $50 million, went to China, according to Taiwanese government data. Fish, which is known for its lean and chewy meat, is considered a relatively high-end seafood in Taiwan usually eaten on special occasions, unlike pineapple. Since China’s ban, the price of one type of grouper has already fallen to $3.30 a pound from $4, according to Mr. Lin, the grouper farmer.

Logistics is also a problem. Most groupers farmed in Taiwan are sold alive in China, where customers generally prefer to eat fresh fish cooked shortly after being killed. Moving to more distant markets would require using what logistics companies call the “cold chain,” a system for refrigerated or frozen transportation and storage of perishable goods, which incurs additional costs. Although there has been a slight increase in interest from domestic customers and Japanese buyers in recent days, several grouper farmers have reported that their phones are unusually quiet.

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“It’s easy to transport live fish to China,” said Kuo Chien-hsien, an assistant professor at the department of aquatic biosciences at National Chiayi University. “So now, if you suddenly want to change models, it’s actually very difficult.”

The latest ban is a sharp reminder to Taiwan of the risks of being too economically dependent on the mainland. Trade between the parties has grown in recent decades, especially under the previous administration in Taiwan when relations were friendlier.

In 2010, Beijing and Taipei reached a landmark trade deal that reduced tariffs on various products, including grouper, and many Taiwanese fish farmers rushed to increase their fish stock, which can take up to five years to be cultivated. When Chen Chien-chih, 50, took over his family’s fish farming business in Taiwan’s southern plains five years ago, groupers were already one of the company’s top exports.

But Mr Chen and his wife, Pan Chiung-hui, 48, grew concerned as China imposed successive bans on other products that were on the list of exports eligible for reduced tariffs, including pineapples and wax apples. Their fears only worsened last year when China announced the discovery of certain chemicals in a batch of groupers imported from two Taiwanese farms.

The couple ran to sell. By the time the ban was announced earlier this month, they had already sold half of their 6,000 fish, mostly to local fishmongers and customers.

“We tried to branch out,” Ms. Pan said in an interview on her farm along a verdant mountain range. “But it was not enough, we still rely heavily on the Chinese market.”

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In recent days, Taiwanese agricultural authorities have reached out to grouper farmers to discuss ways in which the government can help, including providing low-interest loans and food subsidies and expanding access to domestic consumers and to foreign markets. Another idea floated is to include the fish in individually wrapped lunch boxes sold at stations and on trains by the Taiwan Railway Administration. Taiwan’s Fisheries Agency said on Tuesday the agency would spend more than $13 million to support the grouper industry.

The Taiwan Council of Agriculture said it would consider filing a complaint against the grouper ban with the World Trade Organization. Lin Kuo-ping, deputy director general of the official Fisheries Agency, said the government had contacted its Chinese counterparts to discuss the inspection process, but had received no response. The General Administration of Customs of China did not respond to an emailed request for comment.

Some grouper farmers have said that if the ban is not lifted, they will have to settle for selling the fish in the domestic market at a huge loss. Until then, the fish will remain in the ponds. Mr. Lin, the grouper farmer, said he was worried the groupers were dying due to overcrowding.

He is now pinning his hopes on another type of fish he has bred, the four-toed threadfin fish, which is also popular on the mainland. But he acknowledged that even this backup strategy was vulnerable to geopolitical shifts. Last year, Taiwan’s fish exports were worth almost $40 million – and more than 70% went to China.

“Our biggest customer,” he said, “is still China.”

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