Taiwan cracks down on tech businesses with illegal Chinese ownership — 166 investigations and at least 36 convictions since 2020

Taiwan is actively targeting Chinese businesses that operate illegally within its borders, often by hiding their ownership through shell companies or hiring non-Chinese personnel to establish the company on their behalf. According to the Rest of World, Taiwanese laws require Chinese companies to obtain a permit from the government before commencing operations.

However, not all are granted approval, particularly as tensions between Taiwan and China have escalated recently. The investigation comes amid China's efforts to build a self-sufficient semiconductor industry, which has been bolstered by recent trade bans and export controls imposed by the United States. China aims to reduce its reliance on foreign chips and eventually surpass Taiwan's dominance in the advanced processor market.

The Ministry of Justice Investigation Bureau (MJIB) in Taiwan has conducted 166 investigations into illegal Chinese ownership since 2020, resulting in at least 36 convictions. The majority of the convicted companies were involved in semiconductor research, development, and design. Notable victims include tech giants Xiaomi, OnePlus, and Oppo, as well as Semiconductor Manufacturing International Corporation (SMIC), China's leading chip fabricator and a direct competitor to Taiwan Semiconductor Manufacturing Corporation (TSMC).

While some argue that these actions are driven by business needs, others, like former U.S. Department of Defense official Nichol Eftimiades, contend that they may constitute economic espionage, as the definitions of such actions vary across different jurisdictions.