Following the steps of the United States and Japan, the Taiwanese Economic Matters Ministry on Wednesday tightened regulate over Chinese investments because of national security concerns, reported Taipei Times.
Based on new regulations that came into effect from Wednesday, Chinese military-owned companies and Chinese Communist Party-owned companies were banned from making an investment in Taiwan.
“There’s a worldwide trend of scrutinizing investments from China more closely because of concerns that China could gain access to key technologies and information,” said Investment Commission spokesman Su Chi-yen.
“Protecting commerce intelligence is an issue of national security. America, Germany, Japan and Australia have all been regulating Chinese investments more strictly, not just Taiwan,” added Su.
In addition, Taiwan has brought new regulations to shut loopholes that may be used by Chinese companies to skirt regulations. Articles 3, 4 and 6 of the Measures Governing Investment Permits to the People of the Mainland Area have been changed to expand the definition of Chinese capital, reported Taipei Times.
The rule further stated that any company found to break the regulations will face a maximum penalty of New Taiwanese Dollar 25 million and have to divest immediately, informed Su.
The ministry also announced an amendment to the Regulations Governing Investment or Technical Cooperation in the Mainland Area, tightening regulate of Taiwanese technology and highbrow property (IP) going to China, reported Taipei Times.
“Selling or licensing Taiwanese technology or IP will now be thought to be ‘technical cooperation’ and should be approved in advance,” the ministry said in a release.