China Mobile-FET deal dropped over security fears

19 Apr 2013

China Mobile has abandoned plans to purchase a 12% stake in Far EasTone (FET) after Taiwanese authorities refused to ease restrictions on investment, Bloomberg reports. In place of a direct investment, the duo will set up a framework for business cooperation. Fears of espionage were at the heart of the decision, Emile Chang a senior official of the investment commission at Taiwan’s Ministry of Economic Affairs added: ‘Category one telecommunication business involves security issues and is more sensitive, that’s the reason why we are not considering open it to Chinese investment.’ The deal would have represented the first direct investment in Taiwan by a Chinese state-owned company. Tensions between the People’s Republic and Taiwan, to which Beijing still lays claim, have eased somewhat since the current president Ma Ying-jeou took office in 2008. Taiwan is not alone in its caution over Chinese involvement in the telecoms sector: India has ruled out sourcing equipment for crucial infrastructure projects from Chinese vendors whilst US lawmakers plan to implement similar measures.

China, Taiwan, China Mobile, China Mobile Communications Group (previously CMCC), Far EasTone (FET) (incl. NCIC)