Some foreign companies are considering relocating their Taiwanese employees out of China after the Chinese government said it could impose the death penalty on “stubborn” Taiwanese separatists, four people familiar with the matter said.
Oleksiy Liskonich | Image courtesy of Getty Images
“Several companies have come to us to assess the risks to their employees,” said James Zimmerman, a partner at the Beijing-based law firm Perkins & Co., who declined to name the companies or industries, citing confidentiality agreements.
“Companies remain concerned that there may be grey areas, such as innocent social media posts or voting for a particular party or candidate in Taiwan’s elections, that could be interpreted as engaging in pro-independence activism,” Zimmerman said.
Reuters has previously advised Perkins Coy on unrelated issues in China.
According to the Taiwanese government’s latest survey, there are approximately 177,000 Taiwanese working in China as of 2022. Taiwanese staff are employed by many multinational companies in China due to their language skills and familiarity with Chinese culture.
Many more work for the countless Taiwanese companies operating in China that have invested more than $200 billion since 1991, according to Taiwanese government estimates, helping fuel China’s rise to become the world’s second-largest economy.
Some foreign companies doing business in China have held safety meetings with employees, according to two executives who spoke on condition of anonymity because of the sensitivity of the issue.
Another source briefed on the matter said some Taiwanese staff in China had been offered the option to leave the country and had accepted it.
China considers democratically governed Taiwan its territory. Taiwanese President Lai Ching-te has rejected Beijing’s sovereignty claims, saying only the Taiwanese people should decide their island’s future, and denounced China’s new guidelines.
The June 21 guidelines criminalize promoting Taiwan’s membership in international organizations where statehood is a condition, having official contact with the outside world, and suppressing political parties, organizations and people who promote “unification.”
Also illegal would be “any other action seeking to separate Taiwan from China,” language that allows Beijing to interpret the rules broadly, legal experts say.
The guidelines state that “masterminds and those who have committed serious crimes” may be sentenced to death “if the damage caused to the nation or its people is particularly serious and the circumstances are particularly severe.”
The rules do not further specify who is eligible for the death penalty.
Asked to comment on how companies and Taiwanese employees were reacting to the guidelines, China’s foreign ministry told Reuters in a statement: “It is common practice in all countries to use criminal law measures to punish criminal separatist elements and safeguard the core interests of the nation.”
“It is important to emphasize that the relevant legislative documents target a very small number of hardline ‘Taiwan independence’ elements and their separatist activities, and do not involve the majority of Taiwanese compatriots,” the ministry said.
The China Taiwan Affairs Office did not respond to a request for comment. It said last week that the vast majority of Taiwanese people could come “in good spirits” without any worries.
Taiwan’s Mainland Affairs Council, which oversees ties with Beijing, told Reuters in a statement: “The government reiterates its call for Taiwanese businessmen and Taiwanese employees in mainland China to pay more attention to their personal safety. The risks are certainly increasing.”
Last week, the council urged people in Taiwan to avoid non-essential travel to China, Hong Kong and Macau in light of the new restrictions.
The council said last month that eight Taiwanese veterans and police officers had been detained in China in the past year. It warned last year that Taiwanese academics were being detained and questioned upon entering China, even if they were on official exchange programs.
One executive who spoke to Reuters – a senior official in China working with Taiwanese investors – said his mobile phone was ringing as China published the new guidelines and people discussed how they would affect their work.
He said the guidelines, which come on the heels of China’s anti-espionage law and Hong Kong national security law, would increase uncertainty about doing business in China.
The second executive, who works for a large multinational company whose Taiwanese executives frequently travel to China, said the company meets regularly with senior managers to assess risks and consider whether to withdraw talent working in China.
“We haven’t yet reached a decision not to deploy them, but we are assessing the risks on a daily basis,” the official said.
Wen-ti Song, a research fellow at the Atlantic Council’s Global China Hub, said the guidelines would force foreign companies to “either move their operations entirely overseas to secure Taiwanese talent, or stop hiring Taiwanese talent”.
That means “even fewer Taiwanese will work and live in China, making Beijing’s attempts to win the hearts and minds of Taiwanese people even more difficult,” Song said.
Beijing has denounced Taiwan’s Yoritomo as a “separatist” and conducted military drills shortly after he took office in May. Taiwan has complained about increasing Chinese pressure since Yoritomo won elections in January, including military action, trade sanctions and Japan Coast Guard patrols around islands it controls that border China.
Lai has made repeated requests to meet with China but has been rejected.
