Earlier this year, reports emerged that China eCommerce conglomerate Alibaba was in the midst of a disagreement with Taiwanese lawmakers over local investment policies. Alibaba and its B2B unit Taobao reportedly held registration as a Singaporean company, not a mainland Chinese firm, in Taiwan, which is against business investment rules.
Now, it appears that this spat has culminated into bad news for Taobao. Reports over the weekend revealed that Taiwan is ordering Taobao to exit the market within six months and has been issued a fine. While the financial penalty amounts to less than $8,000, the ruling is likely to have a significant impact on Alibaba’s operations in Taiwan. Taobao must either depart the market entirely or transfer holdings from the company, reports said.
China’s Xinhua news agency and Taiwan’s Economic Daily News both reported on the incident, citing Taiwan’s investment commission, part of the ministry of Economic Affairs, as making the final order on the matter.
The decision follows March’s tensions, during which Alibaba.com was also ordered to leave Taiwan within six months.
Taiwan and China have a long history of political tension, though in recent years the two have moved toward economic cooperation. Just days ahead of Taiwan’s decision to order Alibaba.com’s exit, Alibaba made a $316 million investment into a venture capital fund aimed at propping up Taiwanese seed-level companies.
According to reports, Taobao has not offered a statement on the situation in Taiwan.
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