The Mainland Affairs Council (MAC) on Wednesday said it plans to amend legislation to increase penalties for those found poaching talent for Chinese firms.
Officials expressed concerns that people were skirting the law by establishing shell companies in Taiwan to poach local talent on behalf of Chinese companies, and that penalties were too lenient to act as a deterrent.
China has ramped up attempts to poach Taiwanese talent in the past few years, starting with an incentive program introduced in 2018 that offered tax cuts, capital and relaxed restrictions on certification for 134 professions.
China has set its sights in particular on Taiwanese engineers over the past year as demand has increased for computer chips, seeking to close the gap with Taiwan on semiconductor technology.
Taiwanese authorities have attempted to deal with the issue, including by prohibiting job banks from advertising vacancies in China, and most recently by identifying “core technologies” and restricting travel on some people in them.
Tackling these issues raises several questions: Is poaching a national security threat — as some Taiwanese officials have suggested? Can the government effectively curb the brain drain? To what extent can a democratic government restrict people’s actions and movements in the private sector without harming individual freedom?
Salaries in Taiwan are often far below those offered in China and elsewhere, and it is natural for those with high-demand skills to shop around for the positions that offer the best salary and benefits.
Taiwan Semiconductor Manufacturing Co (TSMC) on Tuesday last week became the most valuable traded company in the Asia-Pacific region, while Bloomberg in January wrote that the global supply chain is reliant on chips made by TSMC and other large Taiwanese firms.
However, the Central News Agency in June reported that TSMC’s average salary last year was about NT$1.6 million (US$57,290), including allowances, bonuses and profit sharing, but excluding pensions and benefits. While that is high for Taiwan, it is still below average for a salary at a major tech company elsewhere.
The government’s efforts to curb the nation’s brain drain have focused on poaching by China, but what about those who seek employment options of their own volition? Is an engineer to be prohibited from traveling to China to take up employment they found on their own? That would be an infringement on their liberty.
The government has focused on China, as there is evidence of poaching efforts by firms there, but that is not the only destination for Taiwanese jobseekers. What if they accept work in Japan or the US?
The distinction might be because Taipei is focusing its legislative efforts on China because it sees the Chinese Communist Party as an ideological adversary.
The core issue is not poaching, but rather people seeking salaries, benefits and work environments that their high-demand skills justify. In a market economy such things are usually solved through market mechanisms. For a company to remain competitive, it needs to offer competitive salaries. Poachers might be engaged in unscrupulous practices, but ultimately nobody is being forced to accept their offers.
If the government wants to solve the brain drain issue, it should work with industry leaders, veteran engineers and new graduates to figure out how to keep such workers in Taiwan.
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