November 4, 2019 / 10:05 AM / 10 days ago

China offers more access for Taiwan firms, Taiwan warns of a trap

BEIJING/TAIPEI (Reuters) - China unveiled measures on Monday to further open its markets to firms from self-ruled Taiwan, including capital raising, as Taiwan warned its people not to be taken in by moves at “enticement” ahead of a January presidential election.

FILE PHOTO: Military honour guards attend a flag-raising ceremony at Chiang Kai-shek Memorial Hall, in Taipei, Taiwan March 16, 2018. REUTERS/Tyrone Siu/File Photo

China claims democratic Taiwan as its own and has stepped up pressure on the strategically located island since President Tsai Ing-wen assumed office in 2016, fearing she wishes to push for its formal independence, a red line for Beijing.

As well as flying regular patrols of air force jets around Taiwan and forcing foreign companies to refer to Taiwan as part of China on their websites, Beijing has targeted Taiwanese firms in what it says are steps to make their life easier in China.

Taiwan says this has political aims.

In the latest measures, China will allow Taiwan firms to invest in, or participate in, projects ranging from 5G to civil aviation, and allow Taiwan companies to issue bonds to raise capital on the inter-bank market, China’s Taiwan Affairs Office said in a statement.

China will also make it easier for Taiwanese to live and work in the country and offer Taiwan citizens abroad the right to seek consular help from Chinese embassies, which in practice China has already been doing as it considers them Chinese citizens.

Responding, Taiwan’s Mainland Affairs Council said China was doing this to try to push its agenda of “promoting reunification, enticing Taiwan, and trying to split apart Taiwan internally, showing they are trying to influence Taiwan’s elections”.

Those who go to China need to be aware of the risks and the “differences in the system”, the council added.

Taiwan companies have flocked to China since the two sides begun a detente in the 1980s, attracted by far lower costs and a common language and culture.

The latest steps follow on from rules issued last year to make life easier for Taiwan people and companies in China, which says it genuinely wants to help them.

Taiwan fears China is trying to “absorb Taiwan’s resources” and foster pro-China sentiment on the island, ultimately getting people to vote for China-friendly parties.

China has further pressured Tsai, who is up for re-election in January, her by whittling away Taiwan’s last remaining diplomatic allies, most recently the Solomon Islands and Kiribati.

Tsai says she will not be bullied by Beijing and will defend Taiwan’s security and democratic way of life.

Reporting by Ben Blanchard and Yimou Lee

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