Taiwan has ordered Chinese e-commerce giant Alibaba to withdraw from the island nation within six months. Taiwanese regulators have accused the online retailer of violating investment rules in Taiwan for a Chinese entity. Emile M.P. Chang, the acting executive secretary for the Investment Commission told J.R. Wu of Reuters that the Chinese online retailer has also been fined T$120,000 ($3,824).
Alibaba latest victim of China-Taiwan conflict?
Chang said Alibaba must withdraw or transfer its holdings from its operation in Taiwan. The Investment Commission, which is part of the Ministry of Economic Affairs, reviews investments in Taiwan. Taiwan strictly monitors Chinese investments because it considers mainland China a political threat, even though economic ties between the two have been growing for more than a decade.
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China considers Taiwan a renegade province. Beijing has not ruled out the use of military power to take the island back, particularly if Taiwan moves towards independence. Chang told Reuters that the Investment Commission was monitoring the Alibaba case since the e-commerce giant went public in September last year. The Commission had requested Alibaba to provide documents to clarify its shareholding. But the Chinese company did not provide those documents.
Alibaba to provide required documents
Alibaba said in a statement that the company will communicate with the authorities and provide required documents to comply with the regulations. Since Alibaba’s historic IPO, Taiwanese authorities took a different view of the company and deemed it a mainland Chinese company. Alibaba entered Taiwan in 2008 through a Singapore-based subsidiary Alibaba.com Singapore E-commerce Private Ltd. The Jack Ma-led company has more than 100 employees in Taiwan.
The Investment Commission’s decision comes just hours after Alibaba announced that it would set up a venture capital fund in Taiwan. The Hangzhou-based company has earmarked T$10 billion (US$316 million) to help Taiwanese entrepreneurs who start and grow their businesses through Alibaba’s e-commerce platforms. Last month, the company launched a similar $129 million fund in Hong Kong.
Alibaba shares fell 0.88% to $84.39 at10:34 AM EST on Monday.