The Taiwanese authorities have ordered local companies to pull out of unapproved investments in computer chip companies in mainland China, Reuters reported. The announcement by the cabinet's Mainland Affairs Council said that some investors had admitted to investing in chip-making firms on the mainland and had promised to withdraw the funds.
A task force has been set up to investigate illegal investments and violators are threatened with up to five years' imprisonment. Industry sources said that investments would be hard to trace, as most of them would have been transferred through a third country such as the US. To counter this problem, Taiwan's finance ministry has asked local companies to declare in writing that they have not made such investments.