Taiwan Politics in Brief – December 2016

Ill-Gotten Assets Body Targets KMT HQ

The Ill-gotten Assets Settlement Committee under Chairman Wellington Koo announced that the KMT must transfer its shares of Central Investment Co. and its subsidiary Hsinyutai Co. to the government after it was determined that these companies were illegally obtained assets. The Committee acts under legislation that aims to return millions of dollars in assets allegedly obtained by the KMT during its decades in control of the government. The Central Investment case is particularly problematic for the KMT as the company owns the building housing the party’s headquarters.

Previously Koo had suggested that the KMT could be kicked out of the building on Taipei’s Bade Road, he but subsequently announced that it could instead pay rent to the government. The Committee also rejected the KMT’s request that it be allowed to sell its shares in the two companies to raise cash to pay its workers. The KMT’s cash flow has been severely impacted by the actions of the Committee, and in October the party was even forced to take out loans in the name of Chairwoman Hung Hsiu-chu to pay its staff. The Committee did, however, unfreeze the KMT’s account at Bank SinoPac containing NT$350 million, giving the KMT enough cash to continue to function.

KMT Chair Hung Visists Xi in China

KMT Chairwoman Hung Hsiu-chu met China’s president and head of the Chinese Communist Party Xi Jinping at the Great Hall of the People in Beijing on November 1. During the meeting, Hung reiterated the “1992 Consensus,” the tacit agreement to uphold the idea of “One China,” albeit with “different interpretations,” that has served as the basis for cross-Strait relations for more than two decades. In her meeting with Xi, in which she was accompanied by a number of senior KMT politicians, Hung decried the “dangerous instability” caused by “separatists” in Taiwan, a reference to DPP President Tsai Ing-wen’s refusal to explicitly endorse the 1992 Consensus. Hung told Xi that direct negotiations between the two parties and other organizations could reduce tensions across the Strait, and was quoted by the media as saying, “we believe we will have the wisdom to address the difficult problems in cross-Strait relations.” Hung, however, further stirred controversy by voicing the “One China Principle” without including the remainder of the statement, “with different interpretations,” in violation of her own party’s policy.

Soong meets Xi, Kerry at APEC

KMT Chairwoman Hung wasn’t the only Taiwanese politician to rub elbows with China’s President Xi Jinping in November. On November 19, James Soong, perennial presidential candidate and head of the People First Party, met Xi at the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in Lima, Peru, where Soong represented Taiwan. The two men bumped into each other before a dialogue between APEC economic leaders and the APEC Business Advisory Council, and reportedly discussed trade relations across the Taiwan Strait. Soong was reported to have requested that China maintain the current direction of cross-Strait trade and economic exchanges and consider the needs of Taiwan’s small and medium-sized enterprises. Soong told the media that he would report back to President Tsai Ing-wen on his meeting with Xi later in the month.

Prior to meeting Xi, Soong also had a private meeting with U.S. Secretary of State John Kerry on November 17. Joined by National Development Council Minister Chen Tain-jy, Minister without Portfolio John Deng, and U.S. Assistant Secretary of State for East Asia and the Pacific Daniel Russel in the 30-minute discussion, Soong conveyed the views of President Tsai to Kerry. Soong had a number of other high-profile meetings during the APEC forum, including a conversation with Russian President Vladimir Putin. Although Taiwan is a member of APEC, no Taiwanese sitting president has attended the annual meeting due to pressure from China.

The call heard round the world

Taiwan is rarely the focus of the international media’s attention, but that changed on Dec. 2 when U.S. President-elect Donald Trump tweeted that “The President of Taiwan CALLED ME today…”

A phone call between even the U.S. president-elect and the president of Taiwan breaks 37 years of precedence of no direct communication between leaders from the two governments since the United States broke official relations with Taiwan in 1979 when it formally recognized China.

What the phone call signifies is anyone’s guess at this point, and foreign policy experts were left dumbfounded to explain this major diplomatic shift. The Trump transition team played down the phone call as an understandable gesture from one president to the president-elect of another. Analysts noted that Trump’s ignorance of foreign policy probably played a role, while media has trumpeted Trump’s alleged interest in developing business in the Aerotropolis project at the Taiwan Taoyuan International Airport. China’s Foreign Minister Wang Yi dubbed the phone call “a ploy by the Taiwan side,” while an editorial in the China Daily said that the issue highlights the Trump team’s “inexperience in dealing with foreign affairs.”

New U.S. Transport Chief has Taiwan Ties

President-elect Trump has big plans for infrastructure in the United States, and an immigrant from Taiwan, Elaine Chao, will likely play a key role. Chao, who went with her family to the United States as a young girl, has been tapped as Secretary of Transportation for the Trump administration. Chao is no stranger to high-profile U.S. government positions, having served as Secretary of Labor during the entirety of the George W. Bush administration, the longest-serving person in that position since World War II and the first Asian-American to serve in the U.S. Cabinet. She also served as deputy secretary of transportation under President George H.W. Bush from 1989 to 1991. Chao is married to Senate Majority leader Mitch McConnell of Kentucky.

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