Celebration of national day of the Republic of China outside the Presidential Office Building at the end of the national day celebration in Taipei, Taiwan on October 10, 2020. Photo: EyePress News via AFP)

Taiwan’s Far Eastern Group’s mainland units have been punitively fined for violating business rules over the conglomerate’s alleged donations to politicians who have called for Taiwan’s independence, according to Chinese state media reports.

The conglomerate, comprised of nine listed companies with interests spanning construction materials, retail, hotels, energy and the Internet in China, Malaysia, Singapore, Thailand and Vietnam, is accused by Beijing of sponsoring the election campaigns of Su Tseng-chang, the incumbent president of the Executive Yuan in Taiwan, and his daughter.

Su, together with the self-governing island’s Foreign Minister Joseph Wu and Legislative Yuan President You Si-kun, were put on a list of “Taiwan secessionists” by the Taiwan Affairs Office of China’s State Council on November 5.

China considers Taiwan a renegade province that must be “reunited” with the mainland and has taken increasingly punitive aim at those who promote the island’s independence.

Beijing’s move to sanction a top Taiwanese company for its perceived alignment with pro-independence political forces represents a new punitive tack and could threaten various of the thousands of Taiwanese companies now active on the mainland.

While Chinese officials and state media urged the Far Eastern Group and other mainland-based Taiwanese companies to cut ties with Taiwan independence proponents, ruling Democratic Progressive Party (DPP) lawmakers said the company did not have a clear political preference as it had donated to politicians from both the opposition Kuomintang (KMT) and DPP.

KMT lawmakers, for their part, have urged the mainland to explain more clearly its political donation rules. 

After Chinese President Xi Jinping and United States President Joe Biden held a three-hour virtual meeting on November 16, war drums in the Taiwan Strait have slowed in tempo as both sides agreed to focus more on trade, economic and climate change issues in the short run. However, verbal sparring between mainland China and Taiwan has continued apace.

On November 5, the Taiwan Affairs Office said the mainland would punish people seen as aligned or active with Taiwanese pro-independence forces, prohibiting them and their family members from entering the mainland and the Hong Kong and Macau Special Administrative Regions.

It said it had drawn up a blacklist of “diehard Taiwanese separatists” and their financial supporters. Su, Wu and You were all on the list. Su described Beijing’s blacklist as “ridiculous and unreasonable” while Wu and You said they felt proud to be on the list, which they said proved their contributions to Taiwan’s democracy.  

On Monday, Zhu Fenglian, spokesperson for the Taiwan Affairs Office, said in a media briefing that Taiwan’s Far Eastern Group had recently been investigated and fined for violating local business rules in Shanghai, Jiangsu, Jiangxi, Hubei and Sichuan. Zhu said the company’s idle lands would be confiscated while the company would face a tax review.

“We welcome Taiwanese to invest in the mainland and will continue to protect their legal rights in accordance with the law,” Zhu said. “But we will absolutely not allow people who support Taiwan independence and disrupt the cross-strait relations to make money on the mainland.”

Zhu urged all mainland-based Taiwanese companies to make a clean break with Taiwan independence forces and take action to safeguard the peaceful development of cross-strait relations.

Douglas Hsu, chairman of the Far Eastern Group Photo: feg.com.tw

Shortly after the media briefing, state media said the Far Eastern Group had been punished because its chairman, Douglas Hsu, had donated to DPP politicians including Su and allegedly become a key sponsor of Taiwan independence activities.

Liu Hong, a Xinhua reporter who writes under the pen name “Bull Piano,” wrote in his Weixin account that the Far Eastern Group was not investigated and fined by five local governments randomly but rather was targeted for its connections with “Taiwan secessionists.”

Liu wrote penalties imposed on the company were a warning to all mainland-based Taiwanese companies that they should not cross Beijing’s “red lines.”

Liu opined that other companies with connections to Taiwan separatists would have to pay a price. He thundered that the Far Eastern Group’s units in other Chinese cities and provinces could also face more probes if the company did not correct its wrongdoings.

Founded in 1937, the Far Eastern Group was a major textile product maker in Shanghai when the Republic of China (ROC) was the ruling regime on the mainland. When the ROC retreated to Taiwan in 1949, the company’s founder Hsu Yu-Ziang, Douglas Hsu’s father, also moved his businesses to the island.

Since then, the group has diversified to many other sectors, including power, construction materials, transportation, telecommunication, retail and chemicals industries, becoming one of the five major family businesses in Taiwan.

In 1993, the Far Eastern Group started its retail businesses in Shanghai. In 1996, its Far Eastern New Century unit expanded its chemical fiber and textile businesses to Shanghai and Jiangsu. The Group currently has at least 30 subsidiaries on the mainland.

On Monday, Far Eastern New Century said it had been fined 36.5 million yuan (US$5.71 million) by mainland authorities in the second quarter of this year as it failed to meet some environmental protection, fire safety, equipment and taxation requirements.

It said it had already corrected 98% of the items pointed out by mainland authorities and would finish the remaining 2% by the end of this year.

Asia Cement Corp, a mainland unit of the Far Eastern Group, said it was fined 52.1 million yuan by mainland authorities in the second quarter.

Both companies said they had strictly followed Chinese regulations for many years while the investigations had no significant impact on their financial situations and business operations on the mainland.

On Monday and Tuesday, more Chinese media including the Global Times and Hong Kong’s Wen Wei Po also said the Far Eastern Group was punished because of its political donations.

China accuses Taiwan Foreign Minister Joseph Wu of seeking Taiwanese independence. Photo: AFP

According to public information, the Far Eastern Group donated at least NTD53 million (US$1.9 million) to about 50 election candidates who had Kuomintang, DPP or no political backgrounds in 2016.

It donated NTD3 million to KMT’s Lu Shiow-yen and NTD2 million to DPP’s Su in 2018. It also donated NTD10 million to KMT’s Han Kuo-yu in Taiwan’s presidential election in 2020.

DPP lawmaker Lo Chih-cheng said the Far Eastern Group should not be labeled as a sponsor of any particular political party as it had donated to both DPP and KMT. Lo said mainland-based Taiwanese companies should ignore Beijing’s psychological threats against them.

KMT lawmaker Lee De-wei said he hoped that Chinese authorities would explain clearly whether Taiwanese companies would be targeted for their political donations. Lee said Taiwanese companies should beware that China had recently taken a stronger stance to fight against Taiwan independence.

Wang Hsin-Hsien, a professor at the Graduate Institute of East Asian Studies at Taiwan’s National Chengchi University, said it was normal in Taiwan, Japan and the US for companies to donate to election candidates with different political backgrounds, instead of only one political stance.

Wang said mainland-based Taiwanese companies would face a difficult situation if they were forced by Beijing to take sides between KMT and DPP. The professor said the Far Eastern Group incident could have created a “chilling effect” on some Taiwanese companies causing them in future to withhold their political donations. 

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