China sanctions Robert Tsao and Puma Shen for pro-independence activities



China conducted military drills around Taiwan as a warning against separatism



Tsao and Shen barred from China, Hong Kong, Macau; businesses linked to them restricted

(Updates Oct 14 story with Facebook post by Tsao, paragraphs 14, 15; comment from UMC, paragraph 16; adds bullet points)

By James Pomfret and Ben Blanchard

Oct 14 (Reuters) - China said on Monday it would punish and sanction Taiwanese businessman Robert Tsao and lawmaker Puma Shen for alleged criminal and pro-Taiwan independence activities.

In a statement, the Taiwan Affairs Office said the "Black Bear Academy" that both men were associated with was seeking to incite separatism that would endanger cross-strait ties.

Tsao is one of Taiwan's richest men who pledged two years ago to provide millions to two civilian defence training programmes, including the Black Bear Academy. Shen, a lawmaker with the ruling Democratic Progressive Party (DPP), helps run Black Bear Academy training.

The State Council-level Taiwan Affairs Office said it would include Tsao and Shen on a list of "Taiwan independence" diehards and impose sanctions on them and the academy.

The move comes as China on Monday launched fresh military drills around the democratically governed island that China claims as its own. Beijing said the drills were a warning against "separatist acts of Taiwan independence forces" while denouncing Taiwan leader Lai Ching-te of the DPP.

"This is one of China's many acts of intimidation against Taiwan, including economic coercion, military threats...," a DPP spokesperson said in a statement to Reuters.

"These irrational acts will only further hurt the feelings of the Taiwanese people and damage cross-strait relations."

Tsao and Shen would be barred from travelling to China, Hong Kong and Macau, the statement added, while all affiliated enterprises and businesses linked to the pair would not be allowed to "seek profit" in China.

"The Black Bear Academy with the support of the DPP authorities and external interference forces, has brazenly cultivated violent Taiwan independence elements and openly engaged in "Taiwan independence" separatist activities under the guise of lectures, training, outdoor drills," the statement read, citing spokesman Chen Binhua.

Shen, speaking to reporters, described this as a provocation from China, rather than the other way round, and said it reflected Beijing's great sensitivity towards any civilian defence initiatives in Taiwan.

"They will definitely use the threat of (economic) sanctions to conduct further grey zone warfare against Taiwan," he said.

The Black Bear Academy, also known as the Kuma Academy, said in a statement the moves are "nothing more than politically motivated attempts to undermine our mission and silence those who support Taiwan's right to self-determination and democratic values."

Tsao is the founder and former chairman of chip maker United Microelectronics Corp, and has said he hoped his programmes would help train millions of "civilian warriors" through a mix of survival, Live Draw Sdy Lotto military and counter surveillance and technology courses.

Tsao, in a lengthy Facebook post on Monday, denounced China's Communist Party, saying the country was on the verge of economic collapse and is being "besieged" by the United States, Europe and Japan.

"They understand that using force against Taiwan will lead to consequences they can hardly bear," he added.

UMC declined comment, saying that Tsao had retired a decade ago and no longer had any connection with the company. (Reporting by James Pomfret; Editing by Kim Coghill, Lincoln Feast and Christian Schmollinger)