A massive coordinated raid across several major cities took place in Taiwan on Wednesday. The targets of the raid weren’t distributors of illicit drugs or guns, or any other such criminal staple, but Chinese owned chip and component suppliers, reports Nikkei Asia . Detectives from the Investigation Bureau of the Taiwanese Ministry of Justice (MoJ) were looking for evidence of Chinese tech firms poaching local talent, and aimed to thwart activities seen as "China's attempt to weaken Taiwan's core economic competitiveness."
Over 100 investigators from Taiwan's MoJ swooped into offices at 14 locations across the island. The action mainly took place in technology industry hotspots and science park hosting cities like Taipei, Hsinchu and Taichung. After the site visits, more than 60 people involved in the Chinese companies were brought in for questioning.
We aren't familiar with the Chinese tech firms being put under scrutiny by Taiwan's MoJ, but that might be due to the very nature of these companies, according to statements gathered by Nikkei Asia. The MoJ asserts that many of the Chinese companies raided had set up R&D or other operations in Taiwan without following proper regulations, and some have even sought to disguise ownership, setting them up as local or other-foreign owned companies.
The companies raided on Wednesday had been observed closely for the last six months; their financial and other business dealings, and the personnel flow were under particular scrutiny. China's alleged activity is characterized as more serious than common-or-garden skulduggery, more as an orchestrated attempt to weaken Taiwan, and as a shortcut to bolster China's tech industry development.
China's "Villainous Efforts"
Taiwan's DoJ doesn't pull its punches in an official statement seen by Nikkei Asia. "These are unlawful and villainous efforts and need to be treated seriously," wrote the Investigation Bureau of the Taiwanese Ministry of Justice in a press statement. "This is not only a matter of economic and commercial competition but could be national security threats."
In recent times Taiwanese authorities have become increasingly concerned about talent poaching and tech secrets being leaked by Chinese firms. This anxiety came to a head last month with a new law being drafted by the legislature which could mean up to 12-years imprisonment to those found guilty of acts classified as economic espionage.
Most would agree that Taiwan's crown jewels include its semiconductor and computer component makers. With the rapid expansion of these businesses in recent years the country can't train qualified engineers quickly enough and highly skilled staff are provided with good salaries and sometimes very significant bonuses to remain loyal.
It is natural to protect such a scarce and valuable resource, especially from what is often considered a hostile communist power, and one that is sanctioned by allies in the US.
Lastly, there are rumors that it isn't just the 'free market' for labor in action when a Taiwanese engineer is poached to work for a Chinese owned company. China is giving state backing to various companies seen as essential to its semiconductor industry progress, and sometimes these funds may be helpful in paying more than the norm to hire an engineer from Taiwan or, of course, other countries.