Taiwan Completely Blocks Investment from Mainland Chinese Companies

Economic Influence Removal
Australia Also Pressures China with M&A Restrictions

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Taiwan will block investments from Chinese companies as early as the end of this year. The Taiwanese authorities have revised foreign investment regulations to eliminate China's economic influence, which is expected to further escalate cross-strait tensions.

The Australian government is also restricting mergers and acquisitions (M&A) of domestic companies by Chinese firms, as Western countries are competing to pressure Chinese companies.

According to the Hong Kong South China Morning Post (SCMP) on the 21st, Taiwan's Investment Commission has revised the "Regulations on the Approval of Investments by Mainland Area Nationals," focusing on strengthening restrictions on investments by Chinese capital within the region.

Accordingly, Chinese companies in which the Chinese government (state-owned enterprises), the Communist Party, or the People's Liberation Army hold shares are prohibited from investing in Taiwan. Companies whose boards are controlled by stakeholders from mainland China are also barred from investing in Taiwan.

Su Zhi-yuan, spokesperson for Taiwan's Investment Commission, said, "This is a measure to prevent mainland Chinese companies and funds from entering Taiwan," adding, "The strengthened regulations on Chinese investment align with the strict regulations of the United States and Europe."

The revision is so stringent that it includes not only mainland Chinese companies but also subsidiaries of mainland companies as regulated entities. Previously, companies with a mainland Chinese shareholding of 30% or more were considered mainland Chinese companies.

He explained, "China is making various attempts to increase its economic influence," and "The United States, Australia, Japan, and Europe are also strengthening foreign investment requirements on China." The SCMP added that the revised regulations are likely to take effect by the end of this year and will not be applied retroactively.

Earlier, Taiwan's Ministry of Economic Affairs announced that it would completely ban services such as iQIYI and Tencent Spin, China's versions of Netflix, starting from the 3rd of next month, actively blocking Chinese capital and services.

The Australian government also appears to be restricting Chinese investment in its country. Major media outlets reported on the 20th (local time) that the Australian Treasury is unlikely to approve the acquisition proposal by Chinese dairy company Mengniu for Australia's Lion Dairy & Drinks. Mengniu had proposed in November last year to acquire Lion Dairy & Drinks from Japan's Kirin Holdings for 600 million Australian dollars (approximately 510 billion Korean won).

In June, Australian authorities significantly revised the Foreign Investment Act, granting the final approval authority for foreign investments to the Treasurer.

In this regard, China's state-run Global Times reported, "The Australian government is politicizing economic and trade issues," and "It is still unclear whether the Australian government will actually reject the M&A."

It also added, "Australia's Foreign Investment Act was revised targeting Chinese companies," and "If Australian authorities make political decisions, the economic losses will be borne by Australia."

This content was produced with the assistance of AI translation services.