TAIPEI—Taiwan’s government proposed on Thursday a new law to prevent China from stealing its chip technology, amid rising concern in Taipei that Beijing is stepping up its economic espionage. Tech powerhouse Taiwan makes the majority of the world’s most advanced semiconductor chips, used in everything from fighter jets to mobile phones, and the government has long worried about Chinese efforts to copy that success, including through economic espionage, poaching talent, and other methods. Taiwan’s cabinet said it had proposed new offences for “economic espionage” under the national security law, setting out punishment of up to 12 years in prison for those who leak core technologies to China or “foreign enemy forces.” Using chip giant TSMC’s most advanced 2-nanometer chipmaking technology as an example, cabinet spokesman Lo Ping-cheng said such technology could be deemed vital to Taiwan’s security under the new law, and thus extra protection was needed for it, in …