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To pressure Taiwan, China is now targeting grouper exports

June 23, 2022 by admin

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

Then China abruptly banned all imports of groupers from the island, in an apparent attempt to turn the economic screw on Taiwan, a self-governed island that Beijing claims as its own territory. The move cut Mr. Lin and other farmers like him from their main market, jeopardizing their livelihoods and dealing a huge blow to a lucrative industry.

“If I’m not breeding groupers, what else can I do to live?” Mr. Lin asked one recent morning as he stood on a short concrete wall and looked out over 2.5 hectares of water, divided into pools, in which he farms more than 70,000 fish. The groupers were ready for harvest, but since the ban came into effect a week ago, he has not received orders from fishmongers who would normally drop by at this time of year.

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

Chinese leader Xi Jinping has said Taiwan’s unification with China is inevitable, but most of Taiwan’s 23 million residents are in favor of preserving the island’s de facto independence. While Beijing has stepped up pressure on the island, Taiwan has taken steps to strengthen economic and diplomatic ties with friendly countries, including the United States, the European Union and Japan.

In recent years, Beijing has sent military planes to the island almost daily. It has tried to isolate Taiwan, peel off its few remaining diplomatic allies and prevent 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, after the fruits were said last year to bring in pests.

Taiwan has at times managed to mitigate the impact of such measures. The public quickly gathered to support the island’s pineapple farmers. Restaurants rushed to introduce menus featuring pineapple-centric culinary creations, politicians posted photos of themselves eating “freedom pineapple” on social media, and government officials encouraged officials to eat more of the thorny fruit. Countries like Japan stepped in to help make up for the shortage by increasing their pineapple imports from the island.

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

But for the Taiwanese grouper farmers, turning away from the Chinese market may not be so easy. Last year, 91 percent of grouper exports, worth more than $50 million, went to China, according to data from the Taiwanese government. Known for its lean and moist flesh, the fish is considered a relatively high-quality seafood in Taiwan, typically eaten on special occasions, unlike pineapple. Since the ban in China, 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 raised in Taiwan are sold live to China, where customers generally prefer fresh fish that is cooked shortly after it has been killed. To move to more distant markets, using what logistics companies call “cold chain” would require a system of refrigerated or frozen transport and storage of perishable products, which would incur additional costs. While interest from domestic customers and Japanese buyers has picked up slightly in recent days, several grouper farmers said their phones had been unusually quiet.

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

The latest ban is an acute 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 government in Taiwan, when relations were friendlier.

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

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

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

“We’ve done our best to diversify,” Ms. Pan said in an interview on her farm, next to a green mountain range. “But it wasn’t enough. We are still heavily dependent on the Chinese market.”

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Forced labour. Mining companies in China’s western Xinjiang region are taking on a bigger role in the supply chain behind the batteries that power electric vehicles and store renewable energy. But their ties to forced labor could create problems for industries that rely on materials from China.

In recent days, Taiwanese agricultural authorities have reached out to grouper farmers to discuss how the government can help, including by providing low-interest loans and feed subsidies, and expanding access to domestic consumers and overseas markets. Another idea that has been suggested is to include the fish in individually packaged meal boxes sold by the Taiwanese railway administration at train stations and on trains. Taiwan’s Fisheries Agency said Tuesday the agency would spend more than $13 million to support the grouper industry.

The Taiwan Council of Agriculture has said it would consider filing a complaint about the grouper ban with the World Trade Organization. Lin Kuo-ping, the deputy director-general of the official Fisheries Agency, said the government had contacted their Chinese counterparts to discuss the inspection process but had heard nothing. Chinese customs did not respond to an email request for comment.

Some grouper farmers said that if the ban was not lifted, they would 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 concerned that the groupers could die from overcrowding.

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

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

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