Some foreign companies are considering moving Taiwanese employees out of China after Beijing said it could impose the death penalty on "diehard" Taiwan independence separatists, said four people familiar with the matter.

China has said it seized a Taiwanese boat, which had five crew members on board, for illegally fishing in its territorial waters on Tuesday night. Taiwan has asked China to release the vessel - and the men, two Taiwanese and three Indonesians - which is being held at Weitou, a port in the south-east.

China's seizure of a Taiwanese trawler operating close to the Chinese coast for illegal fishing might be an act of psychological warfare by Beijing designed to further pressure Taipei, a top Taiwan security official said on Thursday.

After China issued new legal guidelines that threatened Taiwan's autonomy, the authorities have now once again attempted to threaten the existence of Taiwan.According to the latest judicial guidelines imposed by China,

This incident has been perceived by Taiwan as an act of psychological warfare, according to a top Taiwan security official. The seizure, which occurred late on Tuesday, saw Chinese officials boarding the boat and taking it to a Chinese port.