Taipei. Image credit: @ryklin.
A plan by Beijing legislators to relax restrictions on Taiwanese businesses operating on the mainland is causing some concern among academics in Taiwan.
Beijing legislators plan a relaxation of restrictions on Taiwanese-based businesses operating in China. Previously, Taiwanese citizens were limited to only retail and restaurant industries, but soon they will be allowed licensing in China for 24 different sectors of industry. On Wednesday, China’s Taiwan Affairs Office (TAO) declared that these restrictions will be lifted next year.
Taiwanese academics are wary of this new ease of way for potential business, skeptical that there are ulterior motives, citing both political and financial risks, as well as warning that the move may lead to a drain of talent from Taiwan.
Hsu Chun-hsin, law professor at Taiwan’s National Cheng Kung University and former legislator of the Taiwan Solidarity Union, believes the lifting of restrictions is a Chinese strategy to weaken Taiwan.
Hsu said that the policy acts as an alternative to the trade in service and goods agreements which may now not end up being concluded. “While many will be tempted to start businesses in China, my experience as a lawmaker made me familiar with many cases of Taiwanese entrepreneurs who were blindsided by hostile takeovers and lost everything. Private operators are no doubt even less protected than their predecessors,” he said.
Economic Democracy Union convener Lai Chung-chiang echoed Chun-hsin’s theory, warning that the restriction lift was only a reaction to the stonewalling of the trade in service and goods agreements by the legislature. He believes the move is designed to drain Taiwan’s talent and capital while increasing its dependence on China as the more connected China is with Taiwan, the easier it will be for China to absorb it. Lai thinks that it is also possible that China intends to use Taiwanese capital and talent for its own “One Belt, One Road” project.
“China is a highly volatile investment environment due to its justice system, tax codes and investment management practices,” said Lai. He also noted that Taiwanese business owners frequently lose their enterprises and sometimes their freedom on the mainland.
“The promotion of the market is the cause of Taiwan’s current economic woes. The government should take measures to prevent more of Taiwan’s technological advantages from falling into Chinese hands,” said Democratic Progressive Party Legislator Lee Chun-yi.
Chiou Jiunn-rong, economics professor at National Central University, added that the yielding of benefits is only superficial. “Only the most well-connected Taiwanese corporations could gain direct access to customers in China, and those customers consist almost entirely of major Chinese corporations,” he said.
Earlier this year, China announced a lift on travel restrictions previously placed on Taiwanese tourists.
By Mary DaMay