Week of Aug. 15-21, 2015

A crisis of confidence in President Ma and KMT presidential candidate Hung causes headaches for the KMT ahead of the legislative elections; media personalities sued over allegations of a Hung quid pro quo deal with the KMT to withdraw from the election; PFP presidential hopeful James Soong’s promise of transitional justice blasted as hypocritical; DPP Chairperson Tsai maintains her lead in the polls. Welcome to this week’s edition of the Insider.



KMT HEADACHES: Chinese Nationalist Party (KMT) legislator-at-large Su Ching-chuan (蘇清泉) declined on Monday to run on the KMT ticket for a legislative seat in southern Taiwan. Reports said the KMT faces a candidate shortfall in six electoral districts in southern Taiwan as few members are inclined to represent the party, which has been hit by public dissatisfaction with President Ma Ying-jeou (馬英九) and the low popularity of its presidential candidate, Hung Hsiu-chu (洪秀柱).

Meanwhile, People First Party (PFP) presidential candidate James Soong (宋楚瑜), whose presidential bid could widen the divisions within the KMT, is believed to be harvesting the local networks he built when he was provincial governor. Soong recently paid visits to several local dignitaries across the nation to woo “KMT powerbrokers.” Soong said on Wednesday that he was simply “bringing some old friends back to the fold.”

Commenting on the possibility that more KMT “turncoats” could join Soong, KMT Chairman Eric Chu (朱立倫) reiterated the need for solidarity within the party. Legislative Speaker Wang Jin-pyng (王金平) remained ambiguous on whether he would campaign for Soong, and said he would “prioritize” the KMT. On Tuesday, Wang denied allegations by a DPP lawmaker that he had “doubts whether Hung could sustain the presidential bid to the end.”

HUNG OFFICE QUASHES RUMORS: Hung Hsiu-chu’s campaign office took legal action against TV political commentator Hu Chung-hsin (胡忠信) and radio host Clara Chou (周玉蔻) over allegations that Hung had made a deal with her party to withdraw from next year’s election in return for securing the legislative speakership.

SOONG UNDER ATTACK: Independent presidential aspirant Shih Ming-te (施明德) blasted James Soong over his pledge for transitional justice, describing Soong as a “former hired thug of the authoritarian regimes in disguise.” Shih said that Soong’s roles as a former KMT secretary-general and director-general of the Government Information Office during the martial law period, when the KMT administration suspended civil liberties and engaged in political repression, had discredited him.

Soong told a TV talk show last Friday that if he were elected he would reopen an investigation into several high-profile politically motivated murder cases from the martial law period and establish a transitional justice committee. Shih accused Soong of plagiarizing his appeal for transitional justice and reconciliation.

HUNG PROPOSES CAPITAL GAINS TAX: KMT presidential candidate Hung Hsiu-chu announced her second major policy on Tuesday with a proposal to divide the current 0.3 percent stock transaction tax into two parts: a 0.25 percent stock transaction tax, along with either a 0.05 percent stock transaction tax or a 15 percent capital gains tax.

Touting Hung’s tax reform proposal as the “most feasible” solution, the KMT called for a policy debate between Hung and Democratic Progressive Party (DPP) presidential candidate Tsai Ing-wen (蔡英文), who criticized the proposal as “detrimental to both national finance and fairness in the tax system.”

In related news, Hung proposed on Sunday more tax deductions for corporations that provide employees with salary increases. The DPP said the initiative would increase the national debt.

TSAI MAINTAINS LEAD: A poll by the Taiwan Indicators Survey Research (TISR) released on Friday showed DPP presidential candidate Tsai Ing-wen in the lead against her opponents, with 37.1 percent, followed by Soong at 20.5 percent and Hung dropping to 13.9 percent.

NEGATIVE CAMPAIGNING IN CYBERSPACE: The DPP has uncovered at least 27 Facebook pages allegedly set up by the KMT to engage in a “systematic mudslinging campaign” against Tsai Ing-wen, the Chinese-language online news website Storm Media reported Saturday. Hung’s campaign office denied the allegations and pointed fingers at Tsai’s supporters for posting digitally manipulated obscene pictures featuring Hung online. Hung’s office called on Tsai to “keep her supporters’ irrational behavior in check.”



US REAFFIRMS SECURITY COMMITMENT: U.S. Department of State spokesman John Kirby reiterated U.S. obligations as stipulated in the Taiwan Relations Act and its commitment to ensure that Taiwan has the ability to defend itself and be free from coercion or intimidation. Kirby made the comments as Taiwan Affairs Office Minister Zhang Zhijun (張志軍), U.S. Deputy Secretary of State Antony Blinken and U.S. Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel were meeting in the U.S. Chinese President Xi Jinping (習近平) is also scheduled to visit the U.S. next month.

KO TOUTS ‘NEW STANDPOINT’ FOR CROSS-STRAIT RELATIONS: Taipei Mayor Ko Wen-je (柯文哲) fleshed out his views on cross-strait relations during the Taipei-Shanghai forum in Shanghai on Tuesday. Ko reiterated his “2015 new standpoint” with the motif that both sides of the Taiwan Strait are “one family,” as well as on “four reciprocal processes”: to know each other, to understand each other, to respect each other, and to work with each other.

Ko’s remarks elicited mixed reactions in Taiwan, with some pan-green lawmakers suggesting that Ko beware of entangling himself in the sovereignty dispute as China could capitalize on Ko’s remarks to promote Taiwan’s unification with China. The DPP said it was pleased to see its mayors and county heads engage in exchanges with their Chinese counterparts. Three city councilors from the DPP attended the forum with Ko.

MA ON ABE WWII SPEECH, LEE: President Ma expressed regret over the “lack of apology” on the “comfort women” issue during Japanese Prime Minister Shinzo Abe’s statement to commemorate the end of World War II. “The Republic of China government believes in the Japanese government’s willingness to reflect on its mistakes, but as a friend, we hope Japan will do more and do better in this regard,” said Ma.

On Thursday, Ma issued an angry response to an article by former president Lee Teng-hui (李登輝) in a Japanese magazine, in which Lee argued that Ma’s commemoration of the end of the Second Sino-Japanese War “contradicted historical facts.”

MAC MINISTER TOUTS ‘1992 CONSENSUS’: The fact that all presidential candidates in next year’s election have drawn their cross-strait policies leaning toward those of the Ma administration is “proof” that the president’s promotion of the “1992 consensus” and the principle of “one China” have “not only worked, but worked well,” Mainland Affairs Council (MAC) Minister Andrew Hsia (夏立言) said at the 40th annual convention of the Chinese American Academic Professional Society in New York on Saturday.

LAI SEEKS TO TAKE CONTROL YUAN TO CONSTITUTIONAL COURT: Tainan Mayor William Lai (賴清德) of the DPP said on Wednesday that he could seek to abolish the Control Yuan following its decision earlier this month to impeach him for his boycott of city council meetings “to clear the influence of black money in local politics” until the corruption charges against Tainan City Council Speaker Lee Chuan-chiao (李全教) of the KMT are resolved by the courts. Lai said he would run for re-election if the impeachment leads to the revocation of his mayorship.

The KMT legislative caucus on Wednesday blamed the surge of dengue fever in Tainan, which has claimed two lives, on Lai’s absence from city council meetings.

SMALL PARTIES FORM ALLIANCE: The Green Party Taiwan and Social Democratic Party (SDP) announced on Monday their plan to register a “Green-SDP Alliance” party to field a joint slate of at-large candidates in January’s legislative elections, in a bid to “eliminate” the KMT while “balancing” the DPP by striving to become the “crucial minority” in the legislature.

CHINESE TRANSIT NOT ON AGENDA OF CROSS-STRAIT SUMMIT: Taipei’s proposal to allow the transit of international flights from China in Taiwan would not be on the agenda of the 11th cross-strait summit between the Straits Exchange Foundation (SEF) and China’s Association for Relations Across the Taiwan Straits (ARATS) scheduled for next week due to a lack of consensus on Beijing’s request for “optimized” flight routes across the Taiwan Strait, according to the MAC on Tuesday.

FOREIGN WORKER WAGES: Taiwan could offer a 6 percent increase of NT$1,000 per month as it negotiates with Indonesia, the Philippines, Vietnam and Thailand on their “unilateral” decision to increase the wages of foreign domestic helpers in Taiwan. However, Taipei said this would not lead to an increase in the local minimum monthly wage amid Taiwan’s economic downturn.

AIRPORT RAIL SAFETY IN QUESTION: The safety of the Airport Rail system was put further in question after it was discovered that a large number of its track pads were damaged. The discovery occurred days after the derailment of a construction vehicle was disclosed. The authorities confirmed that the official date for the launch of the system is yet to be decided pending a comprehensive evaluation by experts at the end of this month. The project was to be completed by the end of this year. A DPP lawmaker accused President Ma of “rushing” the project as part of an “election ploy.”

MINISTER AVOIDS ANTI-CURRICULUM STUDENT CAMPAIGNERS: Two students who protested against the curriculum guideline revision completed on Tuesday their two-week walking tour covering 1,100km across the nation to highlight the issue. Saddened by Minister of Education Wu Se-hwa’s (吳思華) sudden cancellation of his participation in a summer school promotional event upon hearing that the pair attempted to meet him there, the student activists said they “have already given up on ministry officials.”



ECONOMIC OUTLOOK: Taiwan slashed its GDP growth outlook this year by more than half — from the 3.38 percent projected in May to 1.56 percent — on poor export results due to weaker demand, a stalled global economy and tougher competition from Chinese technology firms. The New Taiwan dollar plunged 0.78 percent to six-year low against the U.S. dollar on Monday, deeper than other currencies in the region.

Morgan Stanley strategists identified Taiwan as one of the “Troubled Ten,” a new term referring to countries whose high export exposure and export competitiveness with China make them particularly at risk since China devalued the yuan.

Taiwan’s manufacturing output dropped 9.21 percent year-on-year last quarter, marking the largest scale of decline since the fourth quarter of 2009, the Ministry of Economic Affairs said on Wednesday, attributing this to a drop in global crude oil prices, the rise of China’s internal supply chain and the global currency war.

In response to the downturn, the Cabinet is expected to announce on Monday that civil servants, military personnel and public school teachers will not get a salary increase next year. The Ministry of National Defense came under fire on Monday over its allocating NT$72.45 million (US$2.23 million) for events commemorating the “70th anniversary of the ROC’s victory in the Second Sino-Japanese and its retrocession” since June despite the economic doldrums.



CHINA’S RIMPAC INVITE TO REMAIN: Citing the necessity to demonstrate U.S. leadership and its determination to engage “all maritime powers in the region, including China,” U.S. Secretary of Defense Ashton Carter turned down an appeal by U.S. Senate Armed Services Committee Chairman John McCain to disinvite China from next year’s Rim of the Pacific (RIMPAC) naval war exercises.

An amendment to a bill mandating that Taiwan be invited to join RIMPAC is now being considered by a conference committee before it is forwarded to U.S. President Barack Obama for his signature. If the amendment fails, a clause in the National Defense Authorization Act for Fiscal 2016 that is being considered by the committee provides for a similar requirement.

UPCOMING MILITARY EXERCISES: The second stage of Taiwan’s annual Han Kuang military exercises will be held from Sept. 7 to Sept. 11, simulating an attack from China, the Ministry of National Defense said Tuesday. The first stage of the drills was conducted in May, with its focus on computer war games.


The Taiwan Insider is a weekly feature prepared by the Thinking Taiwan Foundation’s Chris Wang and staff members. Comments? Leads? You can reach us at editor@thinking-taiwan.com. Click here to subscribe to the Insider and receive it in your e-mail.


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