Academics who support the government’s plan to sign an economic cooperation framework agreement (ECFA) with China yesterday warned about potential mergers and acquisitions (M&As) between local and Chinese businesses following the deal, saying this raised national security concerns.
The concerns were raised by Ma Kai (馬凱), an economist and editor-in-chief at the Chinese- language Economic Daily News, and Chen Tain-jy (陳添枝), a professor of economics at National Taiwan University, at a forum the government co-hosted to promote its ECFA proposal.
“Three [local] information service companies have been taken over by Chinese capital; these companies collect confidential information within private enterprises and the government,” Ma said in response to a question from the audience on whether an ECFA would lead to M&As.
He added that Chinese conglomerates proceeded with M&As in Taiwan in a way that is difficult to detect as they set up Taiwanese companies to act as fronts to cover up Chinese capital.
In response to a question on the political effects an ECFA could have, Chen said: “There surely would be political risks behind an ECFA,” and it is an issue the government has to take seriously.
Chen, a former minister of the Council for Economic Planning and Development, urged the government to set up a mechanism capable of checking the background of Chinese capital flows into Taiwan.
“An ECFA is not a purely economic issue,” said Chen, adding that it was wrong for many government agencies to distance themselves from offering opinions on the impact of inflows of Chinese capital on national security.
Chan Man-jung (詹滿容), a member of the Presidential Office’s National Security Council, who also participated in the forum, however, dismissed the misgivings about M&As by Chinese capital.
She said “M&As are not things to be scared of as [Taiwanese companies] can still keep shares in companies even when they are merged or acquired.”
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