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Here’s Why China Cut Off Travel Permits for Tourists Going to Taiwan

Suspending the travel permits lets China remind Taiwan of its economic clout, some analysts say

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Chinese tourists would get close to Taiwan's political heat. Wikimedia Commons

China’s decision last week to stop issuing permits for independent tourists to Taiwan applies new economic pressure to their already strained relations, and analysts see three underlying reasons behind Beijing’s move.

Beijing’s Ministry of Culture and Tourism cited the “current mainland China-Taiwan relations” as cause to stop permitting indie travelers after about a decade. China regards self-ruled Taiwan as part of its territory rather than a state, but Taiwan prefers at least today’s level autonomy over the Chinese goal of unification. That schism has caused the two sides to chafe for 70 years.

Here are three reasons China cut off travel permits:

Taiwan’s president opposes China despite earlier pressure to get along.

Suspending the travel permits lets China remind Taiwan of its economic clout, some analysts say.

The permit shutdown ends a process that generated on average more than 82,000 arrivals per month last year, which boosted the island’s service economy.

china, tourists, taiwan
Despite the military and diplomatic pressure, the government in Taipei openly opposes rule by China. VOA

Since 2016, China has flown military aircraft near Taiwan and persuaded five Taiwanese diplomatic allies to switch their allegiance from Taipei to Beijing. The Communist leadership hopes to pressure Taiwan President Tsai Ing-wen’s government to bargain with China as her predecessor did — on the condition that acknowledges both sides are considered part of the same country.

Despite the military and diplomatic pressure, the government in Taipei openly opposes rule by China. Tsai in January condemned the “one country, two systems” idea that Chinese President Xi Jinping had proposed then as a way to rule Taiwan.

China is “more than furious” that Tsai openly backs anti-Beijing protesters who have taken to the streets in Hong Kong since June, said Sean King, vice president of the Park Strategies political consultancy in New York.

China upped its warnings by calling off Taiwan-bound independent travel, said Liang Kuo-yuan, president of the Taipei research organization Polaris Research Institute. “The headline news will create some psychological effects,” Liang said. “I believe their motivation should be that mainland China wants to say ‘as well as using military threats we can also hold you back economically.’”

china, tourists, taiwan
Suspending the travel permits lets China remind Taiwan of its economic clout, some analysts say. Wikimedia Commons

Taiwan’s president faces a tough reelection bid in 2020. China hopes the tourism suspension will remind Taiwanese that “there are riches to be had” if they reject Tsai’s reelection bid in January, King said.

Tsai is running against Han Kuo-yu, a mayor who supports opening talks with China to bolster economic and investment ties. His party, when in power from 2008 to 2016, accepted Beijing’s condition that each side see itself as part of China for negotiation purposes. The two governments inked 23 deals.

Tsai rejects the one-China condition, and China cut off talks after she took office. China hopes the cut in travel permits will addle the ruling Democratic Progressive Party, said Yun Sun, East Asia Program senior associate at the Stimson Center think tank in Washington.

Hotels near tourist hotspots will take the biggest hit from the loss of self-guided tourists, though many had expected business to taper due to the decline in political relations, said Peter Lin, chief executive officer of the Topology Travel Agency in Taipei. Losses from the travel suspension are estimated at about $1 billion per year.

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Independent travel permits had been suspended because of increasing “risks” for travelers before the election. Wikimedia Commons

“The Chinese do want to show that DPP [Democratic Progressive Party] is not doing good things and want to punish the DPP,” Sun said. “They want to squeeze the election, and tourism is a very convenient channel. The tourism industry in Taiwan will be hit pretty hard.”

Chinese tourists would get close to Taiwan’s political heat. China’s official television network said on its Weibo social media website Wednesday that independent travel permits had been suspended because of increasing “risks” for travelers before the election.

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Beijing frets about its tourists being drawn to Taiwan’s democratic institutions including its unfettered mass media, King said. Relations with China are shaping up as a core presidential campaign issue with daily media coverage.

“There’s the incidental bonus for Beijing of having fewer of its citizens exposed to the island’s vigorously open political culture,” King said. “This fact cannot be overlooked, especially given the protests in Hong Kong, uncensored coverage of which mainland visitors get to see on their Taiwan hotel television screens.” (VOA)

Next Story

Here’s how China Invaded India with Its Technology

Chinese invasion decimates Indian mobile players, automakers next?

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China has slowly but strategically spread its roots in the Indian IT/technology and allied sectors in India. Pixabay

BY NISHANT ARORA

The Great Wall has slowly but strategically spread its roots in the Indian IT/technology and allied sectors in India, and there is no stopping the dragon which has only grown fierce — threatening industries after industries across the spectrum as India celebrates its 71th Republic Day.

From smartphones to automobile/electric vehicles, from digital payments and consumer electronics to social media, Chinese companies have created massive ripples in the country in the last couple of years, while American giants like Amazon and Facebook/WhatsApp face the political heat.

China, which is a fastest-growing trillion-dollar economy with a current GDP of $14.14 trillion is on the path to become a $20 trillion economy by 2024 and India is its “sweet spot” — with millions of consumers buying Chinese goods which has decimated domestic players in certain sectors.

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Xiaomi, a Chinese company has also established itself well in the country. Pixabay

Take the case of smartphone industry. According to Hong Kong-based Counterpoint Research, Chinese smartphone brands captured 72 per cent of the market in 2019 compared to 60 per cent a year ago.

Behemoth like the BBK Group (the parent company of OPPO, Vivo, Realme and OnePlus brands) captured 37 per cent market share while Xiaomi (along with Redmi and POCO brands) came second at 28 per cent.

Led by Xiaomi and BBK Group, the Chinese brands have invested heavily in manufacturing devices and accessories in India.

Xiaomi currently has seven smartphone manufacturing plants in India in partnership with Taiwanese multinational electronics company Foxconn and Singapore-based technological manufacturer Flex Ltd.

More than 99 per cent of smartphones that are sold in India are manufactured locally. Across these seven plants, Xiaomi has employed more than 25,000 people.

Xiaomi also locally sources and assembles PCBA (Printed Circuit Board Assembly) in India. It has invested in setting up smart TV manufacturing plant in partnership with Dixon Technologies in Tirupati, Andhra Pradesh. The company last year infused Rs 3,500 crore into its Indian business unit.

Vivo has committed Rs 7,500 crore as part of its India expansion plan while Chinese company TCL is investing Rs 2,200 crore in Tirupati for plants that will produce mobile handsets and TV screens.

Amid the onslaught, where do you see domestic players like Micromax, Intex, Lava and Karbonn (known as ‘MILK’ brand)?

According to Navkendar Singh, Research Director, IDC India, while we cannot rule out any player making a comeback, especially in such a dynamic market like India, it looks nearly impossible for Indian mobile phones brands to win back any relevant portion of the market.

“China-based brands have been in India for almost 5 years plus now. In this time, apart from snatching the market share almost entirely from the other brands, they have gained immense knowledge about the workings of the India market in terms of consumer thinking, preferences, channel dynamics and marketing interventions,” Singh told IANS.

The Chinese brands are continuously committing resources and investments in all these key areas.

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As China keeps introducing its technology in India, automobile makers will be affected. Pixabay

“Moreover, with more than 3/4th of the market being with 5 players, it is becoming increasingly challenging for any new or old brands like Indian brands to attempt any sustained comeback,” Singh elaborated.

So what are the options for the Indian smartphone players?

“Indian brands can surely look at the feature phone segment, where almost all major China-based brands have chosen to stay away from (expect Shenzhen-based Transsion Group which is the leader). Also, their brand salience remains strong with that consumer segment and Tier II and III markets,” said the IDC executive.

Cut to the Auto Expo 2020 and you will have a better understanding of how Chinese companies muscle their ways.

Top Chinese firms such as SAIC (owner of MG Motors), BYD (maker of electric buses and batteries), Great Wall (which is the biggest SUV maker in China) and FAW Haima, among others, have reserved nearly 20 per cent space in the annual jamboree of carmakers and industry leaders, at a time when the Indian automobile industry is going through a severe slowdown.

Bucking the slowdown trend, SAIC has recorded healthy sales ever since it launched the Hector SUV. At present, the carmaker’s first offering SUV Hector has an order book of 20,000 bookings. It has till date sold nearly 16,000 units of Hector since its launch in July 2019.

The Chinese automobile major has now launched its first electric offering called ZS EV, at a starting price of Rs 20.88 lakh. The company said that it has secured an overwhelming response for the new-age electric SUV, with over 2,800 bookings in 27 days.

To let its EVs run smoothly in India, MG Motor India is building a five-way EV charging ecosystem in association with major domain players.

China’s leading EV company, Sunra, has expressed interest in setting up a factory in the country as it sees India emerging as the world’s biggest market for electric bikes in the next four to five years.

The EV firm has partnered with 16 private companies in Delhi. Nearly six e-bike models of Sunra are under the Automotive Research Association of India (ARAI) test and two of its models are available in some of the showrooms.

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According to a TechSci Research report, electric vehicle market in India is forecast to reach nearly $2 billion by the financial year 2023.

As the Indian government firms up its EV plans, Chinese companies have already set their eyes on the EV sector roadmap in the country. (IANS)