Chinese and Taiwanese flags in Taipei. Photo: Reuters

Taipei has issued its own package of incentives aimed at keeping businesses and professionals on the island as it tries to counter aggressive efforts by China to lure Taiwanese to the mainland.

The eight-point strategy issued by the Executive Yuan includes reduced red tape for initial public offerings, higher subsidies for research, more posts for young researchers and measures to prop up the stock market, Taiwan’s Central News Agency reported.

They are mostly aimed at enticing researchers, medical professionals, entertainers and filmmakers to resist offers from abroad, in particular China. Beijing issued a package of its own last month that offered Taiwanese companies involved in certain sectors equal treatment with mainland firms to help reduce manufacturing and operating costs.

“The government will deal with the measures seriously and respond with practical solutions,” Taiwan’s Deputy Premier Shih Jun-ji said, accusing China of trying to siphon off Taiwan’s capital and talent.

“People should stick together and be fearless. We will continue to ban measures that may impact national security and harm people’s basic rights,” he added.

Taiwan has said that its government agencies and major commercial entities are now ‘crawling with Chinese spies’

The Trade Secrets Act will also be amended to boost penalties for corporate espionage. Taiwan has said that its government agencies and major commercial entities are now “crawling with Chinese spies”.

Analysts believe even more aggressive, unconventional policies are in store as China ties to cower its “renegade province”, including issuing Chinese identity cards and Chinese passports to Taiwanese residing on the mainland. There are currently two million Taiwanese working or studying in China, according to an official population census.

Taiwan may need to consider ways of luring business and commercial elite back home to break the influence China has over their activities, the Liberty Times said in an opinion piece. This influence includes dictating how they vote in the island’s presidential and parliamentary elections.

Taiwan maintains a rigid visa scheme that restricts the number of mainlanders who can work or start businesses on the island in a bid to protect its own labor market. However, there are about 41,000 mainland students enrolled in Taiwanese tertiary institutions.

There have been suggestions that Taipei should “reciprocate” by offering residency rights to these students, especially as a substantial portion have found they can easily identify with Taiwan’s democratic society and personal liberties after years of study on the island.

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