Economics
China Crackdown on Taiwan Inc. Pressures Firms to Look Elsewhere
- Two-way investment across the Strait has slowed this year
- Beijing penalized firm which donated to Taiwan’s ruling party
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Taiwanese companies, which led the charge into China decades ago when the mainland opened to overseas capital, have been scaling back for years because of higher labor costs and more local competition. Beijing’s move last month to punish one of the island’s firms for its political connections threatens to accelerate that.
Far Eastern Group was fined $14 million in November for what officials said were environmental, land-use, health and safety violations. Chinese officials and state-backed media, however, made it clear the fines were connected to Far Eastern’s role as one of the biggest donors to the party of Taiwan’s President Tsai Ing-wen.