China's reliance on Taiwan would make trade retaliation costly

sparked alarm around the region, although its trade retaliation barely made a dent. That is mostly because of the low value of trade restrictions imposed by Beijing, and the chance of China hurting itself given how its economy is intertwined with Taiwan's, analysts say.

Beijing still has a few tools it could deploy to pressure Taipei. China and Hong Kong account for around 40 per cent of Taiwan's total exports, though Taipei has made efforts to reduce its economic dependence on China in recent years.and high inflation, cooling its growth outlook.Trade Sanctions There's also evidence of other tension, including Chinese customs data that show Beijing has blocked other food imports, though it's not clear when those suspensions happened.

Taiwan, though, has reduced its reliance on China in that area since that ban more than a decade ago, according to economists at JPMorgan, who called the most recent restrictions"mainly symbolic".Technological power While homegrown firms in China have made strides in producing advanced chips, industry experts say they remain several years behind TSMC's standards, meaning the Taiwanese firm remains a key resource for China.There are other ways in which the two economies are intertwined aside from trade across the Taiwan Strait.

That could make moves by Beijing to crack down on Taiwanese firms like Foxconn difficult to pull off without impacting those companies' contributions to the local economy.

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