Foreign investors would be better off shifting their capital to Southeast Asian countries rather than China, where the investment climate is hostile and is plagued with contradictory legal rulings, Masaru Hirose, a self-described Japanese victim of investment in China, said in Taipei yesterday.
“The Chinese government has been holding frequent investment promotion activities [to lure foreign investors], while such events only tout the economic benefits and keep prosperity-minded businessmen in the dark about their potential risks,” Hirose said, adding that numerous foreign businesspeople had also fallen victim to the lack of transparency in China.
Hirose said he visited Taiwan at the invitation of the Victims of Investment in China Association (VICA) to help “prevent more Taiwanese businessmen from falling for the allurement of China.”
Photo: Wang Yi-sung, Taipei Times
In an effort to help foreign investors foster a more in-depth understanding of the China market, Hirose said he was in the midst of fleshing out an anonymous platform — which is expected to be titled the Association for Investment Victims in China — for China-based Japanese and Taiwanese businesspeople to exchange trading information to promote transparency.
Hirose said a similar association exclusive to Japanese victims of investment in China was also in the making.
“Japanese are more conservative in general, which results in scores of victimized China-based Japanese firms staying silent about their experiences. Yet more than 100 Japanese corporations are currently prohibited [by Chinese authorities] from leaving China, which reinforces the necessity of establishing the association for Japanese investment victims,” Hirose said.
VICA president William Kao (高為邦) said Hirose’s platform idea was good because he had received complaints from a number of businesspeople from Australia, New Zealand and the US claiming to have fallen victim to China’s “investment trap.”
“Although these are, for now, a few individual cases, they still reflect the severity of this problem,” Kao said.
Turning to Association for Relations Across the Taiwan Strait Chairman Chen Yunlin’s (陳雲林) 10-day visit to Taiwan under the goal of “cultural creativity industry exchange,” Kao urged Chen to confront China’s severe issues of lawlessness instead of launching a publicity campaign in Taiwan in an attempt to further China’s “united front” strategy.
Kao said that despite August’s inking of the Cross-Strait Bilateral Investment Protection and Promotion Agreement, which seeks to provide a legal umbrella for Taiwanese businesses operating in China, the difficulties and predicaments facing these corporations have yet to see much improvement.
Citing the experiences of his father, who spent ¥850 million (US$10.9 million) setting up a plastic molding company in Qingdao, China, as an example, Hirose said foreign investors in China not only risked losing their capital, but also risk their own personal safety.
His father’s company employed more than 600 Chinese workers, but some of them were later laid off due to cost concerns, Hirose said.
“Some sacked employees were so furious at the decision that they deliberately set one of my father’s factories on fire,” Hirose said, adding the incident was followed by death threats a few years later, when a group of gang members entered another of his father’s factories by pretending to be workers, purposely creating labor disturbances and occupying the factory.
“[My father] kept receiving all sorts of threats [from the gang members] and the entire family were utterly terrified,” Hirose said.
In 2009, adding to his father’s predicaments, Hirose said a Chinese business partner serving as general manager forged his father’s seal and pledged the company’s assets as collateral to obtain an overseas business a loan of ¥6.5 million, without any authorization.
After the partner fled China, Hirose’s father was forced to sell his corporation to the creditor bank at a rock-bottom price and assume the ¥3 million of debt, Hirose said.
“Because of legal wrangling, my family was barred by the Chinese government from leaving China. Only after relentless lobbying efforts by members of the Japanese parliament were we released [back to Japan,]” Hirose said.
Hirose pointed to two Chinese laws as being very unreasonable — the Civil Procedure Law and the National Defense Mobilization Law.
Hirose said the former stipulated a person is subject to restriction from leaving China if the person’s willingness to fulfill court execution is in question, while the latter entitled the Chinese government to nationalize private property and confiscate the assets of a foreign firm should China’s sovereignty, unity or territorial integrity be threatened.
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