Taiwan cancels flights as China holds military drills

BEIJING

Taiwan cancelled Thursday’s flights after the Chinese navy launched artillery near Taiwan in retaliation to a visit by a top American lawmaker. The impact on shipments was unclear for processor chips and other goods that global industries require.

China instructed ships and planes to avoid military drills that encircled Taiwan’s self-ruling island. The mainland’s ruling Communist Party claims it as its territory. The drills were described by The South China Morning Post, a Hong Kong newspaper, as an “effective Taiwan blockade.”

Beijing has announced “live fire exercises” after Nancy Pelosi, the Speaker of the U.S. House of Representatives, arrived Tuesday to make a one-day visit. Beijing had warned her not to. It also banned the import of hundreds of Taiwanese food products, including fruit, cookies, and fish.

After a civil conflict, the two sides split in 1949. They have no official ties, but they do have one of world’s most active technology and manufacturing relationships.

According to the China Times newspaper, at least 40 flights from Taiwan were cancelled on Thursday. It quoted Taoyuan Airport in Taipei as saying that cancellations were “not necessarily” related to military drills.

No immediate information was available about the possible impacts on shipping, which could be a catalyst for the global economy to rebound. Taiwan produces more than half of the processor chips that are used in smartphones, automobiles, tablets computers, and other electronic devices.

Any significant disruption will “create shockwaves for global industries.” said Rajiv Biswas of S&P Global Market Intelligence in an email.

Some flights to the mainland might take a detour through Hong Kong. Taiwan’s transport minister, Wang Kwo-tsai, said Wednesday, at a news conference.

Even though the Chinese President Xi Jinping increased pressure on Taiwan by sending increasing numbers of fighter planes to the island to intimidate their government, business has continued to grow

Two-way commerce soared by 26% to US$328.3 Billion last year. Taiwan said The chip sales to Chinese factories rose 24.4%, to $104.3 billion

While fruit, fish, other foods, are only a small percentage of Taiwan’s exports into China, the ban does not affect areas that are considered to be supporters of President Tsai-Ing-wen.

Beijing has used the Philippines’ and Australia’s bans on imports of wine, bananas, coal, and other goods to leverage its position in disputes.