Reuters: Companies consider withdrawing Taiwanese employees from China after death penalty threat

“Several companies have contacted us to assess the risks to their personnel,” said lawyer James Zimmerman, a Beijing-based partner at the law firm Perkins Coie. He declined to name the companies or industries for confidentiality reasons.

“Companies are still concerned that there may be some gray areas, such as whether an innocuous social media post or voting for a particular political party or candidate in Taiwan’s elections could be construed as participation in pro-independence activities,” Zimmerman said.

Reuters had previously consulted Perkins Coie on unrelated matters in China.

According to the latest survey by the Taiwanese government, around 177,000 Taiwanese worked in China in 2022. Due to their language skills and cultural familiarity with the country, Taiwanese employees are employed by many multinational companies in China.

Many more work for the countless Taiwanese companies that operate in China and, according to estimates by the Taiwanese government, have invested more than $200 billion since 1991, driving China’s growth to become the world’s second-largest economy.

Some foreign companies operating in China have held meetings with their employees on security, said the two executives, who wished to remain anonymous due to the sensitivity of the matter.

Another source briefed on the matter said some Taiwanese employees in China had been given and accepted the opportunity to leave the country.

China considers democratically governed Taiwan to be its own territory. Taiwan’s President Lai Ching-te rejects Beijing’s sovereignty claims and says only the Taiwanese people can decide their future. He condemned China’s new policies.

The June 21 guidelines criminalize promoting Taiwan’s accession to international organizations that require statehood, official exchanges with other countries, and the suppression of parties, groups and individuals that advocate “reunification.”

Also illegal are “other actions aimed at separating Taiwan from China” – a formulation that legal experts believe allows Beijing to interpret the rules broadly.

The guidelines state that “ringleaders or persons who have committed serious crimes can be sentenced to death if the damage to the country and the people is particularly great and the circumstances are particularly dire.”

The regulations do not specify who could be sentenced to the death penalty.

When asked how companies and Taiwanese workers are reacting to the guidelines, China’s Foreign Ministry told Reuters: “Using criminal measures to punish criminal separatist elements and safeguard the country’s core interests is a common practice in all countries.”

“It must be emphasized that the relevant legal document is aimed at the extreme minority of die-hard supporters of ‘Taiwan independence’ and their separatist activities, and does not concern the vast majority of Taiwanese compatriots,” the ministry said.

China’s Taiwan Affairs Office did not respond to a request for comment. Last week it said the vast majority of Taiwanese had no reason to worry and could come “in good spirits.”

Taiwan’s Mainland Affairs Council, which oversees relations with Beijing, told Reuters: “The government reminds Taiwanese businessmen and Taiwanese workers in mainland China that they must now pay more attention to their personal safety. The risk is actually increasing.”

Last week, the Council urged Taiwanese people to avoid all non-essential travel to China, Hong Kong and Macau due to the new regulations.

The council said last month that eight retired Taiwanese military and police officers had been detained in China in the past year. Last year it warned that Taiwanese academics were being detained and interrogated upon entering China, even when participating in official exchange programs.

One of the executives who spoke to Reuters – a senior official who works with Taiwanese investors in China – said his phone lit up after China announced the new guidelines as people discussed what they might mean for their work.

He said the guidelines would add to the uncertainty of doing business in China, coming shortly after China’s anti-espionage law and the national security law for Hong Kong.

The second manager works for a large multinational corporation whose Taiwanese executives frequently travel to China on business. He said there have been regular meetings with senior managers to assess the threat and decide whether to withdraw staff working in the country.

“It has not yet reached the point where we decide not to send them there, but we are reviewing the risk on a daily basis,” the manager said.

Wen-Ti Sung, a fellow at the Atlantic Council’s Global China Hub, said the policies would force foreign companies to “either relocate their operations entirely to retain Taiwanese talent, or stop hiring Taiwanese talent.”

That would mean “even fewer Taiwanese would work or live in China, making Beijing’s attempts to win their hearts and minds even more difficult,” Sung said.

Beijing condemns Taiwan’s President Lai as a “separatist” and staged war maneuvers shortly after his inauguration in May. Taiwan has complained of increasing Chinese pressure since Lai’s election victory in January, including ongoing military actions, trade sanctions and coast guard patrols around Taiwan-controlled islands adjacent to China.

Lai has repeatedly offered talks to China, but has been rebuffed.