China doesn’t import coffee through Taiwan anymore – but the relationship lives on

  • China has historically sourced coffee through Taiwan, largely due to its isolationist trade policies
  • Between November 2022 and November 2023, Chinese coffee imports increased by $23 million (38%) to $85 million
  • While China no longer relies so heavily on Taiwan for coffee imports, Taiwanese expertise is still valuable

FOR MANY years, mainland China relied heavily on Taiwan for coffee imports. China’s historical isolationist trade policies left Taiwan – officially called the Republic of China – as the almost exclusive gateway for bringing coffee into the country.

Today, however, the Chinese coffee market has opened up significantly. Consumption grew 15% in the year ending September 2023, reaching just over 3 million 60kg bags; while coffee imports increased by 38% to a total value of $86 million in the year ending November 2023.

This has largely been made possible by diversifying where it imports coffee from. As such, China’s reliance on Taiwan has lessened and made way for new trading dynamics with the rest of the world. The majority of commercial and specialty coffee imports are conducted through direct trade with producing countries – which is much cheaper than passing through Taiwan.

“With the strengthening of China’s diplomatic ties in Central America, the once-monopolised supply that Taiwan had is gradually losing its advantage,” says Lucy Bai Fang, the first AST in China and a Q instructor based in Taipei and Beijing. “With the growth of the Chinese economy and an improvement in people’s taste, there has been significant focus on the Best of Panama and Cup of Excellence auctions.”

Meanwhile, specialty coffee in Taiwan is produced at a much smaller scale, resulting in prices that are 5 to 10 times higher than those of imported Colombian or Ethiopian coffee, which diminishes its attractiveness to the Chinese market.

Another important factor is mainland China’s domestic coffee production, which has evolved into a dependable source of coffee as volumes continue to grow over recent years – currently reaching 150,000 tons in the Yunnan region. “The post-pandemic sense of national pride has sparked a trend among Chinese people to drink domestically grown coffee,” says Lucy. 

China’s historic relationship with Taiwan

Taiwan is geographically separated from mainland China by the Taiwan Strait. China-Taiwan relations have been complex and at times strained since their separation in 1949, and trade has gradually declined over time due to a tense political dynamic. Despite this, mainland China remains Taiwan’s biggest trade partner in various sectors – but coffee is no longer one of them.

It was a different story 15 years ago, however. “Mainland China didn’t have a very clear green importing system back then, but Taiwan did because it has a very long history of coffee consumption and production,” says Marty Pollack, co-owner of Torch Coffee based in Pu’er, China. 

He explains that many major coffee roasters in China were owned by Taiwanese companies, which used to import coffee from their previous suppliers in Taiwan. This dynamic is still present today.

“It used to be very easy to bring coffee into Taiwan, roast it, and ship it [to China] through some cross-Strait carriers or to bring in small quantities of green coffee in the same way,” he says. “But those operations all basically closed down during the pandemic. Today, it’s quite a challenge logistically to get coffee across the strait.”

Lucy explains that 15 years ago, import tariffs were low and determined by weight, and there was no value-added tax on coffee. This made prices manageable – as such, coffee from Taiwan was the preferred choice for Taiwanese businesses in mainland China.

At the same time, Taiwan was in a far greater position to import coffee from the world’s leading producing countries. The country’s longstanding supply chain partnerships with Central and South American countries resulted in more consistent and higher quality coffee bought by Taiwanese buyers, compared to those in mainland China.

However, with containers now shipped directly from producing countries to China, there is no longer a need for cross-Strait shipment from Taiwan.

In addition, most of these Taiwanese-owned coffee shop chains have been replaced by a wave of international and local brands. Domestic brand Luckin Coffee now has 10,829 locations in China, while Starbucks has 6,480. The prevalence of these brands in the Chinese market shows that the relative exclusivity with Taiwanese coffee has long since passed.

Taiwanese expertise

Taiwan has a rich history of coffee production and consumption, and remains an influential force in the global market, but especially within Asia. While countries like Vietnam and Indonesia produce significantly higher volumes, Taiwan has had a notable impact on specialty coffee across the world. As such, the relationship between China and Taiwan is now more about exchanging expertise, technology, and data, rather than physical coffee.

“Coffee travelling to Taiwan, and from there to mainland China is quite a rare occurrence now, with perhaps some exceptions in high-end specialty – like Black Gold, for example,” says Marty. “Taiwanese businesses establishing themselves in mainland China and bringing coffee in is much more common. But Taiwanese influence is still palpable in roasting and trends, with many Taiwanese instructors teaching coffee and opening cafés.”

Collaboration has evolved into service-oriented partnerships, with Taiwanese coffee professionals primarily offering technology and services to Chinese businesses. This dialogue has generated talent and progress on both sides of the Taiwan Strait. 

“In mainland China, there has been a significant influx of returned talents and second-generation entrepreneurs engaging in the coffee industry, which has produced two world champions in the last five years,” says Lucy. “Meanwhile, coffee farmers in Taiwan have advanced technical expertise that is at the forefront of coffee development in Asia and globally.”

Taiwanese entrepreneurs were among the first to open independent coffee shops in Shanghai, and they have been instrumental in training their counterparts in China in areas such as coffee roasting, tasting, and barista skills.

On the production side, coffee breeding science, processing and advanced fermentation techniques are some examples of where Taiwanese expertise has spread through nearby coffee regions and beyond.

Looking back, China’s relationship with Taiwan was essential in establishing a solid foundation for coffee consumption and production on the mainland. While China has undoubtedly become a giant on the global coffee market, it remains clear that ongoing exchanges with Taiwan about technology, skills, and expertise are useful for the country’s staying power as an industry leader.

Coffee Intelligence

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