Taiwan snubs Alibaba funding pledge

Taiwan has snubbed a multi-million dollar funding pledge by China's e-commerce giant Alibaba designed to encourage the island's young entrepreneurs, saying youth talent should stay away from the mainland.

It comes after the island demanded Alibaba withdraw from Taiwan as it had violated investment rules.

Alibaba announced the Tw$10 billion ($316 million) dollar funding scheme for young entrepreneurs to help them set up businesses and sell products in mainland China on Monday.

Company founder Jack Ma emphasised the benefits of the scheme during a speech to students Tuesday, urging them to "follow your dreams".

But the island's top economic planning organisation, the National Development Council, said the mainland "should not be given top priority by young people... given its opaque legal system and implicit rules that could enhance the risks of starting up businesses".

"The (Alibaba) foundation cannot change the reality. We urge those interested people to start up businesses in Taiwan cashing in on the resources offered by the government," the statement late Tuesday added. Tensions are high in Taiwan over increased Chinese influence following a thaw in relations under current president Ma Ying-jeou.

Ma came to power in 2008 on the promise of warmer ties and improved cross-Strait trade to boost the economy, but concerns over Beijing's influence led to his ruling Kuomintang party's heavy defeat in local elections in November.