Taiwan Bans Companies From Hiring Employees in China as Tensions Rise

Taiwan announced a ban on all job postings, especially those involving semiconductors, in mainland China amid rising tensions between Beijing and Washington. Above, masked employees maintain the equipment at a 12-inch United Microelectronics Corp (UMC) wafer factory in Tainan Science Park, southern Taiwan, 28 April 2006. SAM YEH/AFP via Getty Images

Amid increasing tensions between the U.S. and China over Taiwan, Taipei's labor agency has banned staffing companies from posting all job opportunities on the mainland.

"Due to geopolitical tension between the U.S. and China, China's semiconductor development has suffered some setbacks, and as a result China has become more aggressive in poaching and targeting top Taiwanese chip talent to help build a self-sufficient supply chain," the Taiwanese Labor Ministry said in a notice exclusively obtained by Nikkei Asia.

The notice is an extreme measure by Taipei to stop a drain of tech workers from the island to China, and goes as far as to subject violators to fines. It also bars recruitment agencies and head hunters from helping hire workers for positions in mainland China and specifically takes measures against valuable jobs involving circuits and semiconductors, an industry where Taiwan leads.

"If the recruitment involves semiconductors and integrated circuits, the penalty will be even higher," the notice said, according to Nikkei Asia. The new regulation will also apply to Taiwanese companies that have manufacturing hubs in China, 104 Job Bank, the nation's biggest recruitment platform, said to the newspaper.

This will get complicated for companies like Foxconn, an iPhone assembler with massive sites in China. The 104 Job Bank spokesperson said companies such as Foxconn "will also have to remove all of their job listings on the platform first, and then put them back on under their Chinese subsidiaries, which are already approved by Taiwan's Investment Commission for operating in China."

Taiwan has told staffing companies to remove all listings for jobs in China, a drastic move to prevent the outflow of vital chipmaking talent to the mainland.@ChengTingFang and @Lauly_Th_Li report.https://t.co/x2ek9F2RZL #semiconductor

— Nikkei Asia (@NikkeiAsia) April 29, 2021

Nikkei Asia reported the recruitment platform told all clients in a letter on Wednesday to eliminate job postings in mainland China, stating "please close your job vacancies in China as soon as possible to avoid violating the law."

China is a major employment market for Taiwan as about 55 percent of young Taiwanese graduates work in China, according to government data cited by the China Post. The Taiwanese Directorate General of Budget, Account and Statistics (DGBAS) reported that while the number of Taiwanese working in mainland China has declined in recent years, it still accounts for the greatest share of the island's workers abroad, the Taiwan News reported.

And there's a financial benefit to working abroad. A 2019 survey by 104 Job Bank found that Chinese workers make about 1.72 times their Taiwanese counterparts, according to Post.

The Labor Ministry's move comes amid increased tension between China and U.S., as Washington has expressed a renewed commitment to Taiwan's independence. China maintains the island is part of its territory, despite the fact Taipei has long operated as an independent nation. So far, the tensions have largely been a war of words and military moves, with China warning the U.S. "not to play with fire" after it sent warplanes into Taiwanese airspace and President Joe Biden recently authorized the first weapons sale to Taiwan.

But this newest development marks a different kind of battle—one that could change the livelihoods of hundreds of individuals seeking work amid a global pandemic. 104 Job Bank confirmed to Nikkei Asia that as of Thursday night, job listings in China on the platform had dropped from 3,774 to 1,872.

And companies are going to have to innovate quickly to keep up with the new rules. A spokesperson for the platform said to Nikkei Asia: "We don't foresee impact on us, but it is likely to affect enterprises seeking talents on the platform, as there's not enough grace period for these new regulations."

Newsweek has reached out to 104 Job Bank and DGBAS for comment on the economic implications of this decision.