They try in all ways. Villas, cars, double, triple salaries. China desperately needs Taiwanese engineers. The autonomist island, of which Beijing claims sovereignty by promising to pass to the facts, sooner or later, is the beating heart of the most important world technology market.
Semiconductors or microchips, nanometric digital brains at the center of fierce global competition, are assembled in factories in Taipei and on the coast. 92% of the most sophisticated ones are produced there. For the many industrial sectors that depend on chips, from automotive to electronics, Taiwan is seen as an Eldorado.
The Taiwanese authorities are ready to defend with their teeth the secrets of a sector which, alone, is worth almost 15% of GDP. That’s why they switched to countermeasures. A task force of “spy hunters” has set out on the trail of one hundred Chinese companies suspected of wanting to steal Taiwanese engineers and secrets from the Taiwanese industry by illegal methods.
The news was reported by Reuters, citing government officials. Taiwanese law explicitly prohibits Chinese investments in some parts of the supply chain, in particular for the “design” of microprocessors, and provides for stringent controls on other phases of the chain such as “packaging”. In short, for a Chinese company to operate in Taiwan is a real business.
Hence the attempt by Beijing, denounced by the 007 on the island, to bring home the best researchers of the opponent. The ongoing operation, if confirmed, would be by far the largest since the Tsai Ing-wen administration ordered the squeeze. In fact, since December 2020, the counter-espionage team of the Ministry of Justice has been active. The latest hit two months ago: the police raided eight Chinese companies to counter “the illegal activities of the Chinese Communist Party in the hunt for talent and the theft of secrets”.
In the Chinese strategy, microchips are a priority. The “Made in China 2025” plan aims to produce 70% of the chips used by Chinese companies. An ambitious program. Too much, judging by the performance of the domestic market, which is still largely dependent on technology and foreign patents. Especially for the most sophisticated microchips, those under 10 nanometers, of which Taiwan boasts a quasi-monopoly, thanks to the largest sector company in the world, Tsmc (Taiwan semiconductor manufacturing company).
The supremacy in semiconductors is a not secondary element of the American policy towards Taiwan, divided between military support in an anti-Chinese key and economic partnership. The speaker of the American Congress Nancy Pelosi should have dealt with this tooin a scheduled visit to Taipei that infuriated Chinese diplomacy, canceled at the last minute because the Democrat contracted Covid.
The cases of espionage that emerged on the island as a result of the investigations, according to Reuters, are “the tip of the iceberg”. Among the most common practices used by Chinese companies that ended up on trial, the attempt to transfer units to tax havens such as the Caymans to make the flows of money from China more difficult to trace.
Stopping the drain or brain theft is not a walk in the park. The competition between neighbors and rivals at times becomes picturesque. Taiwanese companies respond to the pharaonic salaries offered by Chinese companies with “other advantages such as spas, massages and gyms on the spot,” explains an internal source at the American agency.
But there are other factors hindering Beijing’s plans. As the scenario of a Chinese military operation in Taiwan takes shape, bringing data and knowledge in the most important technological sector to the rival’s companies as a dowry can be seen as treason. In recent months, the transfer of some engineers to the ranks of Smic, the largest Chinese company in the field of microchips, has been greeted by an accusatory campaign in the local press. You can follow the money. But it’s a one way ticket.
