Democratic Progressive Party Legislator Chiu Yi-ying (邱議瑩) on Friday urged the government to stem the illegal flow of Chinese investment to Taiwan through Hong Kong.
Chinese investors are often able to evade government investment restrictions by channeling funding through companies registered in Hong Kong, Chiu said, adding that monitoring such investments has been difficult for the Ministry of Economic Affairs’ Investment Commission.
“A large amount of foreign investment in Taiwan has been coming from companies registered in Hong Kong, but where is the capital really coming from?” she said during the legislature’s plenary session. “To Chinese investors, hiring Taiwanese talent is cheap and the threshold for setting up a company in Taiwan is low — they just need to list Hong Kong as the source of capital.”
Photo: Hsieh Chun-lin, Taipei Times
Of the eight China-funded companies operating in Taiwan uncovered in an investigation, five listed Hong Kong as their source of funding, she said, adding that the companies referred to Taiwan as “China, Taipei” (中國台北) on their Web sites.
One of the companies, Vimicro Corp (中星微電子), is run by Deng Zhonghan (鄧中翰) — a member of the 13th National Committee of the Chinese People’s Political Consultative Conference, she said.
The Investment Commission last year approved investments by 681 Hong Kong-listed companies, she said, adding that with only 60 members, it is hard for the commission to carefully review the about 5,000 applications it receives annually.
Minister of Economic Affairs Wang Mei-hua (王美花) has said that the commission would investigate the background of investments from Hong Kong to determine if more than 30 percent of the funds came from China, but Chiu said that such checks were easy to evade.
“All they need to do is find a proxy, and that proxy can also help them poach Taiwanese talent,” she said.
Premier Su Tseng-chang (蘇貞昌) echoed Chiu’s sentiments, and urged agencies to enhance investigations into the source of Hong Kong listed capital.
“Hong Kong has already been eaten up by China, so why are we even playing this game?” he said. “China is going to transfer money all over the place, so why not just cut off the flow. The Mainland Affairs Council, the Ministry of Economic Affairs and others need to get on this, instead of leaving it up to the Ministry of Justice to deal with it in the end.”
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