Taiwan demands Alibaba's Taobao re-register as Chinese firm or leave

Taiwan gave Alibaba's e-commerce site Taobao Taiwan six months to re-register as a Chinese investment rather than a foreign one, or leave.

The investment commission of Taiwan's Economics Ministry also raised concern about information security as user data was sent back to China, prompting it to fine Taobao Taiwan for $13,960.

According to the commission, Taobao Taiwan was operated by a British-registered firm Claddagh Venture Investment, controlled by Alibaba.

Commission spokesman Su Chi-Yun said they do not consider Taobao Taiwan as foreign investment, and it would have to decide whether to rectify their investment or disinvest.

Taiwan treats investment from foreign countries differently than that from China, with far more stringent rules.

Su said even if Taobao chose to register as Chinese investment in Taiwan, it could still fall afoul of rules barring Chinese companies from sectors vital to its business models, such as third-party payments or advertising.

Claddagh's Taiwan office expressed regret at the move but said it would carry out rectification as soon as possible.

Last week, Taiwan planned to stop local sales of Chinese internet television streaming services, though it does not plan to block them.

Amid growing political tension, Taiwan has stepped up oversight of Chinese investment and Chinese tech firms' operations on the island.