China blocks some Taiwan imports but avoids chip disruption

BEIJING (AP) — China blocked imports of citrus and fish from Taiwan in retaliation for a visit by Nancy Pelosi, a top American lawmaker, to the self-ruled island 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,” said Carl B. Weinberg of High-Frequency Economics in a report.

On Wednesday, Beijing blocked imports of citrus fruits and frozen mackerel from Taiwan after Pelosi, speaker of the House of Representatives, arrived in Taiwan late Tuesday. But the ruling party avoided disrupting the flow of chips and other industrial components, a step that would send shock waves through the shaky global economy.

Beijing also announced four days of military exercises with artillery fire in waters around Taiwan. That might delay or disrupt shipping to and from the island, one of the biggest global traders.

The potential disruption adds to concerns over weakening global economic growth, but Asian stock markets rose Wednesday after there was no immediate sign of Chinese military action.

The Communist Party says Pelosi's visit...