Taiwan on Thursday approved plans to raise fines for illegal funds flowing in from mainland China, as part of a package of new rules aimed at tightening national security in the face of growing tensions with Beijing.
The democratic island's cabinet approved the plan to raise the maximum fine for unauthorized Chinese investments to more than U.S.$800,000, its Central News Agency reported.
The security package targeting funding that may be political in origin, includes sanctions against companies that "evade, refuse, or try to block" government inspections of their situation, media reports said.
The rules, part of legislation governing ties with mainland China, will now go before lawmakers in the Legislative Yuan, and will increase penalties for Chinese nationals, organizations, or institutions that invest in Taiwan by posing as a foreign investor from a third country.
Premier William Lai said the changes had improved the "proportionality" of the current system, as well as introducing more flexible implementation measures.
He called for further debate among lawmakers, officials, and the judiciary on the proposed changes.
Earlier this month, education authorities in Taiwan called on institutions to be wary of giving a political platform to visiting scholars and educators from mainland China.
Academia Sinica researcher Lin Thung-Hong said the island's officials want hosting institutions to beware of changing circumstances under the administration of Chinese President Xi Jinping.
"There is a strong trend towards political censorship, to the extent that all PhD and Master's holders must have come through the mainland Chinese censorship system," Lin told RFA in a recent interview.
"I have seen thesis rejection slips, with the comments that they are 'anti-party' or 'anti-socialism'," he said.
And Cheng Chi-peng, associate professor at Taiwan's Tsinghua University, said China had recently offered to boost the amount of scholarship funding available for Taiwan students studying in China, but only if they signed up to the "One China" principle, which claims Taiwan as a renegade province and part of China's territory.
Meanwhile, experts say that unmarked Chinese money is already flowing into Taiwan, much of it in the guise of funding from a third country or third party.
Yeh Kai-ping, who heads the economic affairs department of Taiwan's Mainland Affairs Council (MAC), said the rules had been changed to stem illegal flows of capital from mainland China into Taiwan's stock market.
"Some mainland Chinese enterprises have evaded inspection by the authorities, so that has also been listed as a punishable offense," Yeh said.
"However, some funds coming to Taiwan from mainland China are pretty small amounts, so it is up to the relevant authorities to issue punishments according the gravity of the circumstances, in a proportional manner."
Much is concealed
MAC deputy chairwoman Lee Li-chen said much incoming investment from China remains invisible to the authorities.
"A lot of mainland investments are concealed, and are even made through impersonation or borrowed [identities]," Lee said. "We are currently seeing some cases of that happening."
New Power Party lawmaker Huang Kuo-chang agreed, citing the example of a mainland Chinese investment company that has been speculating on shares in Taiwan-based conglomerate Tatung.
"Currently, our capital markets in Taiwan lack rigor and discipline," Huang told RFA. "The criminal profits of these illegal activities in our capital market must be confiscated under our legal framework, and investors compensated for loss and damage resulted from [their activities]."
Meanwhile, further legislation is in the pipeline to ban former military, intelligence, and high-ranking public servants with high-level security clearance from attending political activities hosted by senior Chinese officials, honoring the flag or other symbols of the People's Republic of China, or behaving in ways that "damage Taiwan’s dignity," for 15 years after their retirement.
Violators could face the loss of their pension.
Retired top military officials will also be banned from traveling to China for three to six years after retirement, depending on their situation.
The moves come as authorities in Taiwan's Changhua county this week began demolishing a shrine to the Chinese Communist Party on the site of a former Buddhist temple, sending in hundreds of police and security guards to "maintain order" at the site.
The Changhua county government and police dispatched 14 heavy bulldozers to raze the temple on Wednesday, much of which was illegally built by retired military officer Wei Ming-jen as a "base for patriotic education and socialist thought."
Wei has previously claimed that Beijing supports his activities, which included blaring the Chinese national anthem across the valley during daily ceremonies at the temple to raise the flag of the People's Republic of China.
Portraits of late supreme Chinese leader Mao Zedong and Premier Zhou Enlai had replaced Buddhist art on the walls, while Wei had announced his determination to "speed up the reunification" of Taiwan with the People's Republic of China.
The demolition comes amid public concerns that Wei may be an agent of the Chinese state, or at least supported by Beijing's United Front Work Department, and amid criticism of the ruling Democratic Progressive Party (DPP) for not doing enough to prevent the temple from taking shape in the first place.
China's People's Liberation Army (PLA) is gradually preparing for a possible invasion of Taiwan, according to a military analysis published by the Pentagon in Washington earlier this year.
Armed forces under the Chinese Communist Party "continued to develop and deploy increasingly advanced military capabilities intended to coerce Taiwan, signal Chinese resolve, and gradually improve capabilities for an invasion," the U.S. Department of Defense said in an annual report on China's military capabilities.
Support for self-rule
Taiwan was ruled as a Japanese colony in the 50 years prior to the end of World War II, but was handed back to the Republic of China under the nationalist Kuomintang government as part of Tokyo's post-war reparation deal.
When the regime fled to Taiwan in 1947 after losing a civil war to Mao Zedong's communist troops, the Republic of China government ceased to control most of China, though it continues to be the official name of the Taiwan government.
The island began a transition to democracy following the death of Chiang's son, President Chiang Ching-kuo, in January 1988, starting with direct elections to the legislature in the early 1990s and culminating in the first direct election of a president, Lee Teng-hui, in 1996.
Recent opinion polls indicate that there is broad political support for self-rule in Taiwan, where the majority of voters identify as Taiwanese rather than Chinese.
But Beijing regards the island as part of China, and has threatened to invade if Taiwan seeks formal independence.
Beijing has meanwhile succeeded in isolating Taiwan diplomatically by insisting that its diplomatic partners break off ties with Taipei under the "One China" policy.
Reported by Chung Kuang-cheng for RFA's Cantonese Service, and by Hsia Hsiao-hwa for the Mandarin Service. Translated and edited by Luisetta Mudie.