by Brian Hioe

Photo Credit: Solomon203/WikiCommons/CC BY-SA 4.0

THE ECONOMIC DEMOCRACY UNION (EDU) held a press conference late last month outside of the Legislative Yuan, calling for stronger action by the government to regulate Chinese investment in Taiwan, particularly pertaining to the tech industry. 

The EDU is one of Taiwan’s major civil society organizations working on issues ranging from Chinese influence on Taiwan’s economy and media to advocacy for Hong Kong asylum seekers in Taiwan. It played a key role in the 2014 Sunflower Movement, especially with regard to how activists came to an understanding and cemented a political consensus to resist the Cross-Strait Services Trade Agreement that the Ma administration was seeking to pass. 

This issue of regulating Chinese investment is not a new issue, with the Tsai administration having vowed to more strictly regulate Chinese investment and prevent the transfers of sensitive technology to China. What is of note, however, is that the EDU framed the issue as returning to former government officials appointed under the Ma administration, which the EDU asserts still exercise significant power in government–perhaps more than current Minister of Economic Affairs Wang Mei-hua and Financial Supervisory Commission (FSC) chair Huang Tien-mu.

Facebook post by the Economic Democracy Union about the issue

Specifically, the EDU pointed to four Ma administration appointees as the culprits. These are former Minister of the Council for Economic Planning and Development Yiin Chii-ming, this body having been the predecessor to the current Ministry of Economic Affairs, FSC vice chair Wu Tang-chieh, and investment committee secretaries Fan Liang-tung and Tsai Lien-sheng. The EDU argued that the four continue to command substantial power in government. This would be by either continuing to serve in government or taking positions in China’s Cross-Strait CEO Summit, which the EDU termed to be the most significant high-level United Front organization in the business world, and exercising influence as such. 

The EDU claimed that the actions of this “gang of four” constituted a “deep state” in Taiwan. This is not unlike other criticisms of holdovers of KMT authoritarian times, as in “dinosaur judges” that remain in the judiciary and continue to make decisions based on outdated social mores or to benefit fellow members of the pan-Blue camp. It is a newer framing to criticize pan-Blue elements in Taiwan’s economic governing bodies. 

The EDU was critical of that foreign investments of less than 10% do not require review, seeing as to dodge review, investors may split their investment up to several investments so as to avoid surpassing 10%. Likewise, Chinese investment of more than 30% is not allowed, but the EDU views this as an improper metric for measuring influence, as even the largest shareholder of many companies owns less than 30% of a company. 

To this extent, the EDU was critical of current laws governing technology transfers. Apart from that transfer of semiconductor technology is not forbidden, the EDU takes the view that existing laws to regulate semiconductor technology from the Ma administration are outdated and do not take into account current processes, in fact, using outdated notions as a way to avoid strict regulation. Moreover, the EDU criticized that regulations allow for technology transfers under the framework of technical cooperation so long as they are reported to the Investment Commission within two months and current regulations are focused on handling individual cases rather than providing general principles. 

Facebook post by the Economic Democracy Union about its demonstration

The EDU claims that many of these laws date back to the Ma administration. In order to address this issue, the EDU called for changing laws to not base the designation of companies as backed by Chinese investment based on percentages, but on the basis of “significant Chinese influence.” The EDU also called for greater transparency regarding foreign investments in Taiwan and suggested that Taiwan look at the US’ CHIPS Act as an example of measures to prevent the outflow of technology. 

It is to be seen if the Tsai administration takes up the demands of the EDU. There continue to be concerns about economic attempts by China to pressure Taiwan, or to siphon away its tech industry, whether that takes place through corporate espionage, hiring away Taiwanese engineers, or other means. The widespread use of Chinese information and communication technology in Taiwan, including in government facilities, continues to be another matter of concern. But although this year is an election year, the issue of Chinese economic influence over Taiwan is not a major campaign issue at present. 

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