TAIPEI • Taiwan warned yesterday that Hong Kong's decision to freeze assets belonging to jailed media tycoon Jimmy Lai was a sign to the international community that doing business in the Chinese-controlled city was becoming increasingly risky.

The asset freeze, announced last Friday, includes all shares in his company, Next Digital - the first time a listed firm has been targeted by national security legislation in the financial hub.

Shortly before the announcement, the Taiwan arm of Lai's popular Apple Daily said it would stop publishing its print version, blaming declining advertising revenue and more difficult business conditions in Hong Kong linked to politics.

In a statement sent to Reuters, Taiwan's Mainland Affairs Council said the asset seizure highlighted the threat Hong Kong's national security law posed to the property of the city's people.

"It is equivalent to announcing to the international community that Hong Kong's business risks are increasing," the council added. "We also once again call on relevant parties to stop suppressing Hong Kong democrats, otherwise they will drift away from popular sentiment."

The action by Hong Kong marks the first time authorities have used the security law to freeze shares of a listed company's large shareholder, a step that could create jitters for investor sentiment in the business hub.

The former British colony has been rocked by protests against its Beijing-backed government in recent years, and last year China imposed a tough new national security law on the city.

China denies it is aimed at taking away people's freedoms, and says it is needed to return law and order to Hong Kong.

But its broad wording and subsequent application have criminalised much dissent and radically transformed a once politically pluralistic city. More than 100 people have been arrested under the law.

Taiwan has a rambunctious democracy and a free media, and its government has been strongly critical of the crackdown in Hong Kong, to Beijing's anger. The island has quietly given sanctuary to residents who successfully flee there.

Lai has been sentenced to 14 months in prison for joining unauthorised assemblies during pro-democracy protests in 2019.

REUTERS , AGENCE FRANCE-PRESSE