iQIYI Photo: cnsphoto

The island of Taiwan is moving to ban Chinese mainland video streaming services of Tencent and Baidu's iQIYI, which observers said is to butter up to the US to encircle mainland tech companies. However, targeting the platforms welcome in the island is technologically impossible and won't have an impact. 

The economic affairs authority of Taiwan announced on Tuesday night that it is tightening regulations to prevent local businesses from distributing video content produced by mainland companies, effective September 3. 

The notice says that Taiwan companies are not allowed to provide agency, distribution, or engage in any way with over-the-top television (OTT-TV) and its intermediaries or related commercial services with groups and individuals from the mainland. Offenders will be fined from NT$100,000 ($3,403) to NT$5 million.

Video streamers from the mainland had been banned from offering video streaming in Taiwan, but Tencent and iQIYI managed to avoid those restrictions by partnering with local companies.

"Like Netflix, iQIYI is listed on Nasdaq, and the download path of the two platforms is the same, so it should be regarded as an international company rather than a mainland company, but it was portrayed by Taiwan politicians as an enemy," Mike Hsieh, a Taiwan resident close to the media industry, told the Global Times.

He noted that it is shameful double standards to revise the law against mainland companies, whose influence will not be impaired or ignored in this way.

We offer plenty of drama, film, variety, animation and children's materials, but no news or political commentary. It's purely an entertainment platform, completely free of politics, and our users can vouch for that, Fan Li-da, head of iQIYI's agent in Taiwan, told local media. 

Some experts speculated the move by the Taiwan authority is meant to please Washington, which is cracking down on Chinese tech companies and creating trouble through political manipulation.

But observers said Taiwan is thinking too high of itself, as it is a very small market. Whether or not the two companies can continue operating in Taiwan is not really important for them, observers added. 

"People in Taiwan enjoy using mainland platforms and watching mainland TV dramas, but they cannot watch them on TV - only through OTT-TV," Xiang Ligang, an industry analyst, told the Global Times, noting that there are many similar businesses in Taiwan, most of which enter the market through agents without breaking the law.

iQIYI is the most popular mainland streaming platform in Taiwan, with over 3 million users on the island, media reported.