China warns Taiwan firms against ‘backing independence’

By BLOOMBERG

China warned Taiwanese firms against supporting the island’s independence, hours after state media said a Taiwanese conglomerate was fined by mainland regulators as tensions flare between Taipei and Beijing.

Analysts said the move could ratchet economic pressure on Taiwanese companies operating in China — and the local firms that invest in them.

Beijing claims self-ruled democratic Taiwan as part of its territory to be re-taken one day, by force if necessary.

It has intensified military, diplomatic and economic pressure on Taiwan since President Tsai Ing-wen’s 2016 election, as she sees the island as “already independent” and not part of its “one China”.

Beijing “would never allow people who support ‘Taiwan independence’ and damage cross-strait relations to make money on the mainland,” the Taiwan Affairs Office (TAO) said in a statement issued late Monday.

It was responding to a report on the official Xinhua news agency that Taiwan’s Far Eastern Group was fined in China over its investments in several Chinese provinces for violating local regulations.

“The vast number of Taiwanese companies need to tell the right from the wrong, stand firm on their position while drawing the line against ‘Taiwan independence’ splittist forces,” said the statement by spokeswoman Zhu Fenglian.

TAO this month listed several of the island’s top politicians as “Taiwan independence diehards” and warned that the authorities would “pursue criminal responsibility” effective for life.

When asked if the fine was related to the list, Zhu reiterated that the “diehard” politicians, their affiliated businesses and financial backers “will be severely punished in accordance with the law”.

Two Far Eastern units confirmed they were fined over 88 million yuan ($13 million) in China for violating environmental protection, fire safety, taxation and other regulations.

“Looks to me like another small ratchet up, moving from targeting Taiwanese individuals to firms,” Kharis Templeman, a political scientist with the Hoover Project on Taiwan, wrote on Twitter.

“I’d imagine there will be significant resistance to this. The local partners are also making money,” he added.

Far Eastern is one of Taiwan’s largest conglomerates with businesses from textile, construction, hotels to the Sogo department store chain.