China Dangles Carrot to Taiwanese in Battle for Hearts and Minds

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China unveiled a wide-ranging set of incentives to Taiwanese companies and individuals designed to make good on President Xi Jinping's pledge to unify Beijing with the democratically ruled island within a generation.

Just months before Taiwan's January presidential election, China on Monday announced 26 new incentives to Taiwanese companies and individuals across fields including telecommunications, education and sport. They include ensuring a level playing field for Taiwanese companies competing against Chinese counterparts in areas such as 5G, air transportation and theme parks, and open up opportunities for students and athletes.

The announcement follows a January speech by Xi in which he urged any Taiwanese who support the notion that Taiwan is part of China to start working toward the goal of unification. He warned the impasse between the two sides could not be passed on from generation to generation and refused to renounce the use of military force against the island.

Taiwan and China have been ruled separately since Chiang Kai-shek's forces fled Mao Zedong's Communists in 1949 during the Chinese civil war. While Taiwan has existed in ill-defined political limbo since then, almost 90% of the public oppose China's plan for unification.

“These Chinese measures are aimed at promoting one country, two systems with the aim of annexing Taiwan,” Taiwan's foreign ministry said in a statement Monday. “There is a consensus in Taiwan rejecting one country, two systems. China's dishonest offer of help for Taiwan will not succeed.”

Read more on how China's squeeze on Taiwan risks backfiring on Xi

Beijing's offer is the latest step in Xi's strategy of bypassing official contact with the Taiwanese government in favor of direct incentives aimed at entwining private organizations and the public in China's huge domestic market and system of state subsidies. China's government has frozen all official communications with Taiwan since President Tsai Ing-wen came into power in 2016 and refused to endorse the premise that Taiwan is part of China.

To contact the reporter on this story: Samson Ellis in Taipei at sellis29@bloomberg.net

To contact the editors responsible for this story: John Liu at jliu42@bloomberg.net, Sharon Chen, Adrian Kennedy

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