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May 6, 2021updated 08 May 2021 11:26am

Taiwan to plug tech brain drain with new law

By Elles Houweling

Under the mounting pressure of a global semiconductor shortage, Taiwan is taking drastic measures to stop a “brain drain” to China and keep the mainland from gaining access to its technology industry.

The island’s government has recently accused the mainland of waging economic warfare against its tech sector. Four Taiwanese lawmakers from the ruling Democratic Progressive Party passed a proposal to amend the commercial secrets law to widen the scope of what constitutes a state secret.

According to CNA, the proposal aims to toughen penalties on industrial espionage by foreign entities. “The Chinese Communists’ orchestrated theft of technology from other countries poses a major threat to democracy,” the proposal reads. The Cabinet has met many times to work out how to address the problem, the ministry added.

Lawmaker Ho Hsin-chun, one of the legislators who proposed the reforms, said the need was urgent. “The infiltration of China’s red supply chain is everywhere,” she told a parliament committee meeting.

At Taiwan’s Cybersecurity Conference held on Tuesday, President Tsai Ing-wen emphasised that “Taiwan is at the forefront of democracy. It is not only one of the world’s top hot spots for cybersecurity technology, but also on the front line in the fight against cybercrime.”

She highlights the importance of cybersecurity as a matter of national security with a primary strategic significance in Taiwan’s industrial development, alluding to the geopolitical tension between the island and mainland China.

Amid the current international chip shortage, all eyes are on Taiwan to meet global demand. Meanwhile, China is also feeling the pressure as it tries to build an autonomous domestic semiconductor industry.

As a result, allegations of industrial espionage from mainland China have increased significantly in recent years. Taiwan’s Economy Ministry said that China was trying to boost its semiconductor industry by “poaching” Taiwanese talent “as well as obtaining our country’s industry’s commercial secrets, to harm the country’s competitiveness,” Reuters reports.

The latest proposal follows a series of measures to stop the Taiwan brain drain to mainland China. Last month, the island’s Labour Ministry told Taiwanese and foreign staffing companies to remove all listings for jobs in China to prevent the outflow of valuable tech talent to the mainland.

It is not clear when or if the amendments could be passed into law, and the Justice Ministry in its report suggested further discussion of the wording was needed.