China blocks some Taiwan imports but avoids chip disruptions

“The global economy cannot function without chips that are made in either Taiwan or China,” Carl B. Weinberg of High-Frequency Economics said in a report.

China blocked imports of citrus, fish and other foods from Taiwan in retaliation for a visit by a top American lawmaker, Nancy Pelosi, but has avoided disrupting one of the world's most important technology and manufacturing relationships.

The two sides, which split in 1949 after a civil war, have no official relations but multibillion-dollar business ties, especially in the flow of Taiwanese-made processor chips needed by Chinese factories that assemble the world's smartphones and other electronics.

They built that business while Beijing threatened for decades to enforce the ruling Communist Party's claim to the island by attacking.

Two-way trade soared 26% last year to $328.3 billion. Taiwan, which produces half the world's processor chips and has technology the mainland can't match, said sales to Chinese factories rose 24.4% to $104.3 billion.

“The global economy cannot function without chips that are made in either Taiwan or China,” Carl B. Weinberg of High-Frequency Economics said in a report.

On August 3, Beijing blocked imports of citrus and frozen hairtail and mackerel from Taiwan after Ms. Pelosi, speaker of the House of Representatives, arrived on the island. China has not disrupted the flow of chips and other industrial components, a step that would send shock waves through the shaky global economy.

Also this week, China blocked imports of hundreds of other food items from Taiwan including cookies and seafood, though the timing was unclear. The customs website showed their import status was switched to “suspended.”