The New Power Party (NPP) caucus yesterday called on the Investment Commission to punish businesses that invest in China without permission, after Foxconn Industrial Internet Co Ltd (FII) invested in Chinese chip company Tsinghua Unigroup.
FII, which is 85 percent owned by Hon Hai Precision Industry Co, invested 5.38 billion yuan (US$795.7 million) in the Chinese-backed company earlier this month.
Not only is the deal politically sensitive, Hon Hai also failed to follow the procedure stipulated in the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例), which requires investments in China in sensitive industries or in excess of US$1 million to be approved in advance, NPP caucus whip Chiu Hsien-chih (邱顯智) told a news conference in Taipei.
Photo: Tu Chien-jung, Taipei Times
Hon Hai made the investment on July 11 and submitted it to the commission for review on July 19, he said.
According to Article 35 of the act, Hon Hai can face a fine of up to NT$25 million (US$835,729) for investing before obtaining approval, he said, adding that the fine can be imposed repeatedly if the company does not resolve the issue.
He questioned whether the fine is too lenient for the company in comparison to its investment and asked the government to reconsider whether the penalties are effective in deterring huge investments made by multinational enterprises.
The commission should consider the impact of the investment on Taiwan’s competitiveness, he said.
Even if approval is granted, the commission should add an incidental provision based on the Administrative Procedure Act (行政程序法) to reserve the right to rescind the approval if an unexpected situation arises, he added.
NPP Legislator Claire Wang (王婉諭) said that Tsinghua plays an important role in China’s semiconductor development and is owned by Beijing Zhiguangxin Holding Co, whose biggest shareholders are financially backed by FII and the Chinese State Council.
The investment can therefore be considered Hon Hai supporting the Chinese semiconductor industry together with Beijing, which might threaten Taiwan’s semiconductor industry in the long term, she said.
NPP Chairwoman Chen Jiau-hua (陳椒華) warned the government against the impact the investment might have and demanded that it review the case strictly.
Industries that involve important semiconductor technologies such as IC design and 12-inch silicon wafer production were listed as “prohibited categories” for investment in China, but were changed to “general categories” by the administration of former president Ma Ying-jeou (馬英九), she said.
Although the National Security Act (國家安全法) was amended in May to protect Taiwan’s “core” technologies, its effectiveness might be limited if the list of prohibited investment items is not updated, she added.
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