Mon, Sep 03, 2007 - Page 1 News List

Officials issue PRC investment warning

CAUTION According to Cabinet spokesman Shieh Jhy-wey, there are more than 10,000 commercial disputes involving Taiwanese businesspeople in China

By Shih Hsiu-chuan  /  STAFF REPORTER AND STAFF WRITER

Government officials yesterday called on Taiwanese businesspeople thinking about doing business in China to consider the risks before investing there.

The call came in the wake of an incident in which Shin Kong Mitsukoshi department store general manager, Steven Wu (吳昕達) who leads a group of Taiwanese staff operating the Shin Kong Place in Beijing, was reportedly forbidden by Beijing authorities from leaving China just before he was scheduled to return to Taiwan for a conference.

Wu returned to Taipei on Saturday, but Shin Kong Mitsukoshi declined to confirm whether Wu, who is also the general manager of Shin Kong Place department store in Beijing, had fallen out with his Chinese partner over the ownership of the store.

Cabinet spokesman Shieh Jhy-wey (謝志偉) yesterday said the incident showed that China is governed by a state with unlimited power.

As China is a country not ruled by laws but by the law of the jungle, businesspeople have to make risk a assessment before investing there, Shieh said.

There are more than 10,000 commercial disputes involving Taiwanese businesspeople with investments in China he said.

The Chinese-language Commercial Times reported on Saturday that Chinese Public Security officers said Wu was allegedly involved in economic crimes and should not leave China until a criminal investigation had been carried out.

The paper quoted a member of Wu's Taiwanese staff as saying that Wu was caught off-guard by the order, adding that it probably stemmed from a dispute between Wu and his Chinese partner, Ji Xiao-an (吉小安), chairman of Shin Kong Place, over the management of the store.

Shieh yesterday said the Shin Kong incident serves as a warning to Taiwanese businesspeople as it shows that even a big enterprise can meet with trouble.

Vice President Annette Lu (呂秀蓮), at a separate setting yesterday, said Taiwanese businesspeople should protect themselves whenever they can when doing business in China because China does not follow its laws. Since China does not recognize Taiwan, there is little the government can offer by way of assistance in the event of any problems, she said.

Commenting on the incident, Chinese Nationalist Party (KMT) vice presidential candidate Vincent Siew (蕭萬長) yesterday said he hoped Taiwanese businesspeople would learn from the incident as "there are risks involved in overseas investments."

Given the lack of government-to-government channels across the strait, the assistance Taiwanese authorities can give to investors in China is limited and so businesspeople have to assess risks before making any investment decision, he said.

Aside from Wu, Yeh Shuo-tang (葉碩堂), chairman of Chien Shing Stainless Steel Co (千興不鏽鋼), has been barred from leaving China for more than a month and is under investigation by Chinese tax and commerce agencies.

Yeh left for China on July 23 on a business trip. He maintains his innocence in the case, the Chinese-language Liberty Times (the Taipei Times' sister newspaper) reported yesterday.

Yeh is in Wenzhou, Zhejiang Province, awaiting notice of an official document to lift the restriction order, the paper said, citing Yeh.

But there were also reports that Yeh was actually detained by Chinese authorities due to his failure to honor a promise to build a stainless steel plant in Zhangzhou, Fujian Province.

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