Known for their crunchy-fluffy texture, coconut-flavour Kuai Kuai corn chips have been hugely popular in China for years.
They’re not just considered tasty, Kuai Kuai — which means “behave well” or “be good” — are also supposed to be a lucky charm that helps keep technology functioning in good order.
But the iconic green packets — featuring a leprechaun-like mascot — are disappearing from Chinese supermarket shelves.
The snacks are among more than 2,000 Taiwan-made products Beijing has banned from being imported to China following US House of Representatives Speaker Nancy Pelosi’s visit to the self-ruled island.
Other products banned include candy, soft drinks, pineapple cake, soy sauce, instant noodles, kumbucha, pastries, frozen fish and citrus fruits.
Taiwan’s Central News Agency said the blacklisted goods account for about two-thirds of the island’s food exports to mainland China.
But there’s another kind of Taiwanese-manufactured chip that Beijing just can’t seem to say ‘no’ to — computer microchips.
‘A symbolic action’
It’s not the first time recently that Beijing has used economic sanctions to target Taiwan.
In March 2021, China suspended imports of Taiwanese pineapples due to “dangerous organisms” it claimed could come with the fruit and endanger its own agriculture.
Six months later, it also suspended imports of Taiwanese sugar apples and wax apples for similar reasons.
The official explanations for the new sanctions have varied.
While state-run media in China have reported they were “countermeasures” in response to Ms Pelosi’s visit, Taiwan’s Economy Department said earlier this week some of the products were officially barred because they were not marked as being made in “Taiwan, China”.
China’s General Administration of Customs claimed the fish packets “tested positive for COVID-19” and the fruit contained high levels of drugs and chemicals.
Beijing hasn’t said why the Kuai Kuai corn puffs were blacklisted.
The ABC has contacted China’s Ministry of Commerce for comment.
A spokesperson for a Taiwanese baked goods company told the ABC they were surprised when Beijing banned them from exporting six products to the mainland including cookies, candies and bread.
Concerned about the potential impacts speaking to the media might have, the spokesperson requested the company not be named.
“The only explanation we received was that we failed to deliver some required documents,” the spokesperson said.
She said they still didn’t know what the documents they supposedly failed to supply were.
Taiwan’s Council of Agriculture has promised impacted farmers and companies would receive government support.
Professor Elliot Fan, from the economics department of the National Taiwan University, said the sanctions would have little effect on Taiwan’s economy.
“At this point, China’s penalty appears to be a symbolic action,” Professor Fan said.
“The banned items account for less than 1 per cent of Taiwan’s total exports to China.”
Professor Fan said Taiwan’s exports to China “are significant”, but one-third of them are semiconductor products — which were not mentioned by Beijing.
Taiwan’s high-tech ‘sacred mountain’
Some have questioned why Beijing has taken an iron fisted-approach to Taiwan’s food and agricultural sectors but spared the island’s most important industry.
In particular, Taiwan’s — and the world’s — largest microchip manufacturer Taiwan Semiconductor Manufacturing Company (TSMC), which was the only company Ms Pelosi visited while in Taiwan.
Taiwanese people have started calling TSMC the “sacred mountain” because it protects the island’s safety and economy.
With a market capitalisation of $US541 billion ($778 billion), it is the 10th-most valuable company in the world and the primary microchip supplier for global leading tech companies, including Apple, Intel, and Advanced Micro Devices (AMD).
According to Taiwanese market intelligence firm TrendForce, TSMC dominates the semiconductor market, making up 53.6 per cent of sales in the world semiconductor foundry industry in the first quarter of 2022.
China’s 5G giant Huawei was TSMC’s second-largest customer until 2020 when the Trump administration ordered the company, which depends on US chip manufacturing equipment, to stop taking Huawei’s orders.
It continues to supply a range of other Chinese tech companies including Xiaomi, OPPO, Horizon Robotics, and Bitmain.
This all makes it a glittering prize for both the China and the US.
TSMC was already setting up a factory in Arizona before US President Joe Biden this week signed the CHIPS and Science Act, which offers $US52.7 billion in subsidies for semiconductor manufacture and research.
In exchange, funding recipients are not allowed to increase semiconductor production in China or any other nations that pose a danger to US national security under the Act.
It’s intended to make the US more competitive with China’s science and technology endeavours.
Meanwhile, China has been trying to ramp up production of its own chips at state-owned SMIC in Shanghai.
Still, Taiwan’s Bureau of Foreign Trade reports that China has already imported more than $US62 billion (about $89 billion) worth of semiconductor products in 2022.
Su Zih-Yun, a researcher from Taiwan’s Institute for National Defence and Security Research, said China “is a realist” and wouldn’t dare to sanction a manufacturer as important to China’s economy as TSMC.
“China relies heavily on Taiwan’s electronic components,” he said.
“For the US-China competition, TSMC is the key.”
“That’s why they [Beijing] have picked industries like agriculture and baked goods.
“The competition between the two has entered the micro level, that is, the competition about the microchip.”
‘No one can control TSMC by force’
Along with the economic sanctions, Beijing also responded to Ms Pelosi’s visit with a series of military drills around Taiwan that the island’s foreign minister and others said was a practice-run for an invasion.
Beijing stated in a government white paper released on Wednesday that it “will not renounce the use of force” and that it will “be forced to take drastic measures” in response to “the provocation of separatist elements or external forces” if they cross “red lines”.
Additionally, according to the white paper, Taiwan’s economy would benefit from smoother supply chains and “display greater vitality in innovation-driven growth” after it became part of mainland China’s.
So what would happen to TSMC if Beijing went ahead with an invasion?
Dr Su said China taking control of the island would likely damage TSMC’s manufacturing capacity and attractiveness to Western customers.
“Data privacy protection is essential for democratic countries,” he said.
“If China’s supply chain was involved, it is possible personal data could be accessed by the companies on China’s side.”
Mark Liu, the chief executive of TSMC, said an invasion by China would wreck the company.
He told CNN earlier this month that China using military force or invading “will render the TSMC factory non-operable”.
“This is such a sophisticated manufacturing facility — it depends on the real-time connection with the outside world, with Europe, with Japan, with the US,” he said.
“No one can control TSMC by force.”