photo: web

Taobao Taiwan announced on Thursday to shut down the e-commerce site amid rising cross-Straits tensions.

In an announcement on its website, Taobao Taiwan said after cautious deliberations, the company decided to close the order placement function starting on Thursday and continue the operation of e-money wallet, official logistics, and customer service until December 31 when the site will be officially shut down.

"The company is committed to protecting the rights of buyers and sellers … Before the platform is officially shut down, the established orders will be protected by the user service agreement," the announcement said.

Taobao Taiwan is run by British-registered Claddagh Venture Investment.

Alibaba said in a statement sent to Global Times that it respects the decision of Claddagh and has no comment on the closure. The group said it has licensed the brand to Claddagh, which operated as an independent firm.

"Alibaba Group's business in the Taiwan market is in operation as usual, and we will continue to provide premium products to consumers in the Taiwan market through mobile platform," the statement said.

Taobao Taiwan was fined NT$410,000 ($14,276) and given six months to disinvest after it was determined as a Chinese-mainland investment by the economic department of the Taiwan Island in August, according to a previous report by China News Agency.

The ruling came after the economic department of the island found out that the Claddagh Venture Investment was controlled by Alibaba Group.

Although Alibaba Group holds less than 30 percent stake in Claddagh which is in line with the current regulation on Chinese investment in the island, Alibaba Group could actually control the operation of Claddagh, according to Taiwan media reports.