Taiwan Legislator: Mainland Chinese E-Commerce Dumping a Threat to National Security

November 13, 2018 Updated: November 13, 2018

A staggering 80 percent of 38 million packages entering Taiwan in 2017 came from mainland China, raising concerns about e-commerce dumping on a scale that endangers the self-governing island’s national security.

Chen Ying, a lawmaker in the Republic of China (Taiwanese) Legislative Yuan affiliated with the Democratic Progressive Party (DPP), warned that Chinese merchants were impacting local industries and markets via “planned dumping strategies.”

At the same time, Chinese-made products linked to the “internet of things” (IoT) can pose security risks by sending information back to Chinese receivers.

In 2014, Taiwan received 17.4 million mail packages, less than half the figure in 2017. Of that total, 31.84 million packages came from mainland China. Of almost 2,000 parcels found to be in violation of local ordinances, all except one package from Vietnam were found to have originated in China, according to the Customs Administration, an agency operated by Taiwan’s Ministry of Finance.

Taobao.com, a subsidiary of Alibaba Group, is currently the largest e-commerce platform in China. After its chairman Ma Yun announced his retirement, however, its leadership has been turned over to the Chinese Communist Party (CCP), Chen said.

This September, Taobao began opening stores in Taiwan and plans to open 500,000 online stores. The Chinese regime has also begun subsidies for cross-border Chinese e-commerce providers, which Chen says is part of the CCP’s strategy to use dumping to undermine Taiwan.

Chen said that China had weaponized its burgeoning online shopping industry, to flood Taiwan with cheap and duty-free goods. This has impacted the wholesale and retail industries in Taiwan, as well as other sectors. She also expressed concerns about Chinese products, which could aid the Chinese regime in spying on Taiwan.

The U.S. government has similar concerns about risks associated with products in the internet of thing (IoT), as laid out in a recent report published by the U.S.–China Economic and Security Review Commission.

The report explained in great detail how the Chinese regime has prioritized development of IoT technology as an objective for its national interests and financially supported the domestic industry. These give Chinese IoT technology economic advantages that could allow it to spy on consumers, gain military innovations, and unfairly edge out U.S. IoT companies.

“China is also actively researching IoT vulnerabilities, both for security purposes and almost certainly to collect intelligence, conduct network reconnaissance for cyberattacks, and enhance its domestic surveillance powers,” the report said. Not only can Chinese companies access U.S. data from users who purchased Chinese-made devices, they can also buy up U.S. IoT companies and the data they possess—or buy U.S. data from a third-party vendor.

Beijing also has broad powers to demand domestic and foreign companies operating in China hand over customer data.

There have been numerous cases of Chinese companies making products that can be remotely accessed or were later found to be secretly collecting data and sending them to servers in China.

In 2017, for example, more than 175,000 IoT cameras around the world produced by Shenzhen Neo Electronics Co. Ltd. were found to be remotely accessible.

In 2013, Russian customs agents found Chinese-made kettles and irons containing WiFi chips that could search for unsecured WiFi networks and “phone home” to grant access.

At the end, the report offered recommendations to the U.S. government to create trade measures that can prevent China from using their economic advantages to continue dominating the IoT market.

Chen Ying urged the Taiwanese government to investigate overseas e-commerce platforms, and protect the rights of Taiwanese consumers and businesses. She said that existing controls on foreign packages entering Taiwan are insufficient, and advocates transactions and shipments be registered on a real name basis.