The government would bolster its security check system to prevent China from infiltrating the nation’s medical cold chain, a national security official said yesterday.
The official, who wished to stay anonymous, made the remarks after the Chinese-language magazine Mirror Media (鏡周刊) reported that Pharma Logistics (嘉里醫藥物流) is in charge of the medical logistics of about half of the nation’s major hospitals, including National Taiwan University Hospital and Taipei Veterans General Hospital.
The company’s parent, Kerry TJ Logistics Co (嘉里大榮物流), is associated with the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) and the Chinese People’s Liberation Army (PLA), the report said.
Photo: CNA
Pharma Logistics is also one of the key contractors of medical drug distribution in Taipei, New Taipei City and Keelung, it reported, adding that the company’s cold chain logistics center in New Taipei City’s Sijhih District (汐止) is responsible for the storage and delivery of the Centers for Disease Control’s (CDC) disease prevention resources.
Kerry Logistics is affiliated with Hong Kong’s KLN Logistics Group (香港嘉里物流) and KHL Holding (嘉里控股), and has cross-shareholdings with China’s SF Holding Co (中國順豐控股), the magazine said.
SF Holding is China’s biggest logistics company, and it acquired Kerry Logistics in 2021, it added.
KHL Holding chairman Kuok Khoon-hua (郭孔華) has been a member of the CPPCC Beijing Municipal Committee since 2023, and his sister Kuok Hui-kwong (郭惠光) is a member of the CPPCC Shanghai Committee, the magazine said.
SF Holding has signed a strategic cooperation agreement with the PLA Air Force, and is incorporated in the logistics network of the Chinese Communist Party’s (CCP) “military-civil fusion” strategy, it added.
In response to concerns about the potential national security threat, the official said that Taiwan would bolster its security check system, prohibit monopolization of critical logistics systems and include key companies that cooperate with the government in its security check system.
Security check systems should be enhanced for critical infrastructures and key industries, especially those associated with societal security resilience, to check for Chinese funding or abnormal connections with China, the official said.
Aside from medical resources, logistics systems are also involved in the distribution of key daily necessities, so monopolies should be banned and solid backup systems must be in place, regardless of whether Chinese infiltration is involved, the official said.
Lastly, while logistics companies only handle commercial logistics in normal times, government agencies should have open-ended contracts with the companies that they normally cooperate with to systematically include them in its security check system and ensure that they are not associated with Chinese funding, the official said.
Tunghai University Center for Mainland China and Regional Development Research deputy director Hung Pu-chao (洪浦釗) yesterday said that the situation poses a national security threat.
Medical logistics is a lifeline during wartime, so if critical cold chain and distribution nodes are controlled by companies that are bound by Chinese law, then Taiwan’s healthcare system would be exposed to enemy surveillance, he said.
It is not only a logistics chain management issue, but a vulnerability in the nation’s defense resilience, Hung said, adding that the government should classify medical logistics under critical infrastructure, pushing for localization and restricting Chinese funding to prevent external control in times of emergency.
The threat of Chinese infiltration through funding is not only about money, but about information, he said.
China’s National Intelligence Law requires companies to cooperate with its intelligence agency, so if they are connected to China or Hong Kong’s Internet domain, Taiwan’s hospital codes, delivery routes and patients’ information could be leaked, Hung said.
This is a highly private information that could result in significant risks, so the government must set up a sovereign defense line for protecting such information, and ensure medical logistics information remains in Taiwan and is safely managed by Taiwanese, he added.
The greatest crisis lies in “local infiltration,” because if a hostile force could legally enter sensitive industries in Taiwan, there would be security vulnerabilities within the system, Hung said, urging the government to enhance investment reviews and beneficial owner disclosure mechanisms, classify medical logistics as strategic assets and prevent subversive infiltration.
Only by addressing these systemic risks could Taiwan’s defense resilience really be established, he said.
Deputy Minister of Health Lin Ching-yi (林靜儀) yesterday said that the ministry would discuss with agencies setting up backup logistics systems and information nodes.
Medical response relies on collaboration among multiple systems, including local health departments and healthcare facilities, so the ministry has asked healthcare facilities to store certain quantities of vital drugs and medication for emergencies, and work with logistics companies in allocating resources when there is insufficient supply, he said.
The law does not prohibit Chinese investment in logistics companies, so the ministry would discuss with the Food and Drug Administration how to establish backup logistic systems, Lin said.
The CDC yesterday said it ended its contract with Pharma Logistics last year.
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