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China warns firms on Taiwan island against ‘backing independence’

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

China warns firms on Taiwan island against ‘backing independence’

China has 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 Beijing and Democratic Progressive Party-led Taiwan authorities.

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

Beijing claims 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 authorities 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 on November 22.

It was responding to a report on the official Xinhua News Agency that Taiwan’s Far Eastern Group was fined in the mainland 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 more than 88 million yuan ($13 million) in mainland 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.

While relations between the Chinese government and Taiwan authorities are at their lowest in decades, Beijing has largely avoided punitive measures against Taiwanese companies that might impact mainland Chinese investors.

Margaret McCuaig-Johnston, an expert at the China Institute at the University of Alberta, said the TAO’s warning suggests that might have changed.

“Like Canadian and Australian businesses, Taiwanese firms are now finding that doing business in [mainland] China carries a much higher risk than other countries,” she wrote on Twitter.

“Those who can’t afford their business to be suddenly hit by malign & fabricated accusations should diversify to other countries.”

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

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