Taiwan Threatens To Deregister Alibaba’s Taobao

Taiwan has joined the U.S in taking a shot at Chinese-backed firms over national security concerns Given their close ties to the ruling communist party. The island nation has asked e-commerce site Taobao to re-register in the country in the next six months or face the risk of being blocked from operating in the country.

Taiwan Taobao Standoff

The order comes on Taiwan’s heels stepping up oversight of Chinese investments and operations in the Island nation. Last week, Taiwan bared the sale of Chinese internet televisions streaming services as it continues to tighten its trading rules with mainland China.

Taiwan and China have never had a close relationship following the 1949 civil war that resulted in a split. With Beijing always threatening to invade the island, Taiwan has always watched links of companies from China trying to do business on the island.

While Taobao Taiwan is operated by the British Claddagh Venture Investment group, their tie to Alibaba, which has stakes in the company, continues to rattle Taiwan authorities. For starters, the company’s share agreement gives the e-commerce platform permission to send consumer transaction data to the Alibaba group server, which officials in Taiwan fear poses a significant national risk.

While Alibaba owns a 29% stake in British Claddagh, its shareholding structure gives it the power to control Taobao Taiwan by vetoing all decisions. Authorities in Taiwan insist that the e-commerce platform linked to Alibaba is a potential risk to national security.

Chines Companies Standoff

Taiwan joins a number of countries that have started taking a shot at Chinese companies amid growing national security risk. The U.S has been the most aggressive, having already imposed curbs on Huawei Technologies.

The U.S has also set sights on Chinese viral video-sharing app TikTok due to concerns that the Chinese Communist Party is using it to access U.S user’s data. The U.S government has already issued an order barring U.S companies, as well as federal agencies, form dealing with the app as well as WeChat another popular messaging app.

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