Amid a management dispute over the Taiwanese-Chinese Shin Kong Place joint-venture in Beijing, Chinese Beijing Hualian Group forcibly took over ownership of the department store by bringing in more than 200 "security officers" before firing all Taiwanese executives without warning, accusing them of accepting bribes relating to the construction of the store.
Steven Wu (吳昕達), general manager of Shin Kong Place, was asked to get off a plane and detained in Beijing. After massive media coverage of the dispute, China's Taiwan Affairs Office broke with its ridiculous but established practice of not meddling in "business disputes," and Wu was able to return to Taiwan after five days of house arrest.
Taiwanese were utterly astonished by Beijing Hualian's illegal and predatory behavior because they don't understand the facts about investing in China.
As a matter of fact, thousands of cases in which joint ventures were seized by the Chinese party share a similar process: A joint-venture is established, the Chinese party breaks the contract, then looks for faults, people from the other party are detained and the Chinese party takes over complete ownership.
The TAO said the dispute was simply a misunderstanding.
But if this is the case, shouldn't Beijing Hualian Group unconditionally return the management rights to Shin Kong?
The Taiwan Affairs Office stressed that it would protect the legal rights and interests of China-based Taiwanese businesspeople in accordance with the Law of the People's Republic of China on Protection of Investment by Compatriots From Taiwan, and Chinese President Hu Jintao (胡錦濤) also indicated that the dispute should be settled as soon as possible.
We will see if the Chinese government will deal with Beijing Hualian according to the law. As a proof of its sincerity and resolve, the Chinese Communist Party's central leadership should prevent similar cases from happening again.
Take my personal experience for example.
On Feb. 21, 1999, during Lunar New Year, my Chinese manager colluded with another company, which claimed to be the industry's biggest in China, and brought more than 50 workers to my factory to cut the telephone lines.
After the security guard refused to open the gate, two people pretending to be judges appeared.
In the end, all manufacturing equipment, raw materials, finished and semi-finished products, computers and account books were driven off in 16 huge trucks in a single day.
Public Security officers refused to accept the case because they didn't believe that robbery could take place in broad daylight.
The director of the Yanjiao Development District located in the east of Beijing said: "We cannot interfere because it is an economic dispute."
Robbery cases are left unsettled by the Public Security Bureau and there is nothing Taiwanese businesspeople can do about it.
My Chinese manager later became even more aggressive, bringing me to court for owing him US$78,000 and my company for owing him 500,000 yuan.
In private, the judge told him to raise the amount to US$100,000. I can only assume the extra US$22,000 was going to the judge. There was no receipt or any transfer records of the transaction.
The only evidence given was that "someone had heard William Kao mention it," someone of course being a friend of the manager. This meant that "proof was well established."
Since I am a Taiwanese businessman, they assumed that I would flee to Taiwan, so I would have been locked up until the debt was paid off.
Because the whole case had attracted a lot of attention, I was not sent to jail.
Eight years later, there still isn't the slightest possibility of justice being served.
The people responsible for the seizure of Taiwanese assets in China are not the stoolpigeons we hear about in the news, but the Chinese authorities
Because we cannot compete with public authorities, Taiwanese businesspeople are doomed to lose.
When something like this can happen in one of Taiwan's leading enterprises, it goes without saying that the situation is even worse for small and medium Taiwanese enterprises that have had their companies stolen from them.
William Kao is president of the Victims of Investment in China Association.
Translated by Ted Yang
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