Chi Mei's woes on the mainland began after group chairman W.L. Shi backed the campaign of Chen Shui-bian of Taiwan's pro-independence Democratic Progressive Party who won presidential elections in March, they said.Company vice president Hsu Chun-hua told Reuters Chinese tax, customs, environmental protection and labour officials have inspected five of the group's six joint-venture plastic raw material plants in China for possible wrong doing since mid-May.

He said the inspections, which he described as"out-of-the-ordinary", had disrupted operations at the plants.

Shi told Taiwan's mass circulation China Times he was frightened by the harassment and was considering a possible scale-down of investment.

"Communist China really scared me this time," Shi was quoted as saying. "I have to prudently consider whether to cut back expansion plans or even scrap them."

"You don'T know what problem will be encountered tomorrow."Taipei and Beijing have been diplomatic rivals since 1949 when the Communists won a civil war on the mainland. President Chen took office last month in the island's first democratic transfer of power and has distanced himself from his pro-independence stand of the past.

But Beijing, which has threatened to invade if Taiwan declares independence, remains deeply suspicious and has said it would look and listen to what Chen did and said.

The Taiwan petrochemical group joins pop diva Chang Hui-mei, affectionately known to fans in the Chinese-speaking world as A-Mei, as the latest casualty of simmering tensions between Taiwan and China.

A-Mei's television, print and radio advertisements for a soft drink have been banned across China after she sang Taiwan's National anthem at Chen's May 20 inauguration, sparking widespread resentment on the island.

No penalties yet The inspectors have yet to decide whether Chi Mei broke any rules or regulations, but the company is bracing for more inspections.

"We don't know if there'll be a second or third wave," Hsu said.

"We will pay close attention and observe whether it is long or short-term which will influence whether we invest on the mainland or elsewhere.""The number of inspectors and government units involved was bigger than normal.

And the inspections happened all at the same time," he said. He declined to give a figure for estimated losses due to the slowdown.

Chi Mei has invested US $200 million in six joint-venture plastic plants in China since 1991.

Hsu said the group had planned to invest an additional US $1 billion in China over the next 10 years in petrochemical and electronics ventures.Chi Mei boasts assets of T$60 billion with interests in petrochemicals, food, plastics, electronics and trading.

The company'sprofit after tax profit rose about 20 per cent lastyear to T$4.5 billion from the previous year on sales of T$45 billion.

Beijing has also criticised shipping magnate Chang Yung-fa of Evergreen Marine and Stan Shih of computer giant Acer Group for throwing their weight behind Chen during election campaigning.

Chang and Shih have denied they support independence and insisted their operations in China have not been hurt. On Wednesday, Evergreen shares slipped T$0.70 to T$26, while Acer rose T$1.50 to T$63.