Hong Kong offers loophole for Chinese money: lawmaker

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The Investment Commission has to review about 5,000 investment applications in Taiwan every year, which is difficult to manage, said Chiu Yi-ying.

  • By Hsieh Chun-ling and William Hetherington/staff reporter, with a staff editor

On Friday, Democratic Progressive Party lawmaker Chiu Yi-ying (邱議瑩) urged the government to stem the flow of illegal Chinese investment to Taiwan via Hong Kong.

Chinese investors are often able to evade government investment restrictions by channeling funds through Hong Kong-registered companies, Chiu said, adding that tracking such investments was difficult for the Securities Commission. investments from the Ministry of Economic Affairs.

“A lot of foreign investment in Taiwan comes from companies registered in Hong Kong, but where does the capital really come from?” she said during the plenary session of the legislature. “For Chinese investors, hiring Taiwanese talent is cheap and the threshold to start a business in Taiwan is low – they just need to list Hong Kong as a source of capital.”

Photo: Hsieh Chun-lin, Taipei Times

Of the eight Chinese-funded companies operating in Taiwan discovered in a survey, five listed Hong Kong as the source of funding, she said, adding that the companies referred to Taiwan as “China, Taipei” (中國台北) on their names. Web sites.

One of the companies, Vimicro Corp (中星微電子), is led by Deng Zhonghan (鄧中翰) – a member of the 13th National Committee of the Chinese People’s Political Consultative Conference, she said.

Last year, the Investment Commission approved investments from 681 Hong Kong-listed companies, she said, adding that with only 60 members, it is difficult for the commission to carefully scrutinize the roughly 5,000 requests it receives each year.

Economic Affairs Minister Wang Mei-hua (王美花) said the commission would investigate Hong Kong’s investment background to determine whether more than 30% of funds came from China, but Chiu said such checks were easy to evade. .

“They just need to find a proxy, and that proxy can also help them poach Taiwanese talent,” she said.

Prime Minister Su Tseng-chang (蘇貞昌) echoed Chiu’s sentiments and urged agencies to step up investigations into the source of Hong Kong-listed capital.

“Hong Kong has already been devoured by China, so why are we even playing this game?” he said. “China is going to transfer money everywhere, so why not just cut off the flow. The Mainland Affairs Council, the Ministry of Economic Affairs and others should take care of it, instead of leaving it to the Ministry of Justice to take care of it in the end.

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