photo: web

Taobao Taiwan said on Thursday that it would shut down its e-commerce site in the island of Taiwan after the venture was labeled a Chinese mainland investment, a move that observers said reflects some island politicians' trick of sacrificing the common people's livelihood to serve their own purpose of seeking economic decoupling with the mainland.

"After cautious deliberations, the company decided to close the order placement function in the island starting on Thursday and continue the operation of other services such as e-money wallets, official logistics, and customer service until December 31, when the site will be officially shut down," said Taobao Taiwan in an announcement on its website.

Launched in the island of Taiwan in October 2019, Taobao Taiwan was operated by UK-based Claddagh Venture Investment. However, the Investment Commission of the island of Taiwan said on August 24 that it found that Alibaba Group has control of Claddagh Venture Investment, although it holds a 28.77-percent stake in the latter, which is less than the 30 percent cap.

Subsequently, the department fined Taobao Taiwan NT$410,000 ($14,276) and asked Alibaba to divest the stake in six months or Taobao Taiwan to rectify its operations, local media China News Agency reported.

Claddagh Venture Investment said it had shut the e-commerce site due to "multiple uncertainties in the market", according to Reuters.

Alibaba said in a statement sent to the Global Times on Thursday that it respects the decision of Claddagh. "Alibaba Group's business in the Taiwan market is in operation as usual now, and we will continue to provide premium products to consumers in the Taiwan market through our mobile platform," it said.

As for the claim of mainland investment, Alibaba said that it licensed the brand to Claddagh Venture Investment and Taobao Taiwan operated as an independent firm.

The island's move to ban Taobao Taiwan aroused heated discussion in the Chinese mainland, as observers noted that some politicians in Taiwan are seeking economic decoupling with the mainland, while many countries and regions are strengthening trade with the mainland. They said this is a "tragedy" that will only harm the Taiwan economy.

A Taiwan netizen said that the shutdown of Taobao Taiwan has no impact on him, because he will still buy products on the mainland Taobao site, but the island of Taiwan authorities' unwise move will result in the loss of local jobs.

"The increase of mainland investment to the island of Taiwan benefits the island, as it injects new impetus into Taiwan's industries and financial market, and generates many jobs while strengthening cross-Straits cooperation," Dai Shugeng, a professor with Xiamen University, told the Global Times on Thursday.

Given the mainland's huge market potential and economic scale, the impact of the island's exclusion of mainland investment will have a greater negative impact on the island itself, Dai said.

The export-reliant Taiwan economy took a hit from the global pandemic and it has struggled to find growth momentum. Its GDP shrank 0.73 percent year-on-year in the second quarter of the year, the worst since the fourth quarter of 2009, according to the island's statistics agency. Meanwhile, the island's tourism department estimated that tourist arrivals may be only 1.35 million this year, a 20-year record low.

Against this backdrop, its reliance on the mainland in terms of economic and trade has further increased, Wang Yong, a professor with Xiamen University, told the Global Times on Thursday.

Taiwan's exports to the mainland and Hong Kong in August accounted for 46.39 percent of the island's total exports, a record high, according to the Taiwan Affairs Office of the State Council.