Week of March 5-11, 2016

Beijing brings up more sticks and carrots targeting Taiwan’s incoming administration as Chinese President Xi and Premier Li warn against Taiwan independence; China also promises assistance to address Taiwan’s energy supply issues and unilaterally proposes a high-speed rail link between Beijing and Taipei; the Mainland Affairs Council does not see a Tsai-Xi meeting happening; military police’s warrantless search of a civilian’s residence spurs public outcry; the US leaves open the possibility of President Ma meeting U.S. government officials during transits on his upcoming trip to Central America. Welcome to this week’s edition of the Insider.



BEIJING APPLIES PRESSURE: Beijing stepped up its rhetoric on Taiwan’s sovereignty and president-elect Tsai Ing-wen’s (蔡英文) administration last Saturday, with Chinese President Xi Jinping (習近平) saying that China will “resolutely” contain Taiwan independence in any form and Premier Li Keqiang (李克強) sending out a warning against “separatist activities” that jeopardize China’s “territorial integrity.”

The Chinese Communist Party (CCP) will not have any direct contact with the Democratic Progressive Party (DPP) unless the DPP renounces Taiwanese independence, Association for Relations Across the Taiwan Straits (ARATS) Chairman Chen Deming (陳德銘) also said on Monday, adding that “peaceful development” and “familial affinity” would be the basis for dialogue with the Tsai administration. China’s stance on the so-called “1992 consensus,” to which Xi referred on Saturday as the nonnegotiable bottomline for cross-strait relations, remains unchanged, Chen said.

Addressing Li’s remarks, back in Taipei the Mainland Affairs Council (MAC) said the government’s “mainland policy” is to maintain the “status quo” of “no unification, no independence and no armed conflict,” advocated by President Ma Ying-jeou (馬英九) and to promote peaceful and stable developments based on the “1992 consensus.”

The DPP said its China policy was framed by “maintaining the status quo,” but simply defined the status quo as Taiwan remaining democratic and free with peaceful relations across the Taiwan Strait. The party reaffirmed its commitment to cross-strait peace and stability.

TRADE IN GOODS AGREEMENT COMPLETED? China remains committed to developing economic ties with Taiwan, ARATS Chairman Chen Deming said on Monday, citing its readiness to extend technical and capital assistance to meet Taiwan’s power, water and hydrocarbon needs-as long as there is a “will” for continued cooperation.

Chen, who denied there was any hidden annexationist agenda in its offer, caused a bit of a stir by claiming that negotiations on a cross-strait trade in goods agreement had “already been completed.” Minister of Economic Affairs John Deng (鄧振中) dismissed Chen’s remark, saying that talks on the pact had been on hold since the Jan. 16 elections. The lack of consensus on the issue of tariff reduction for four major industries in Taiwan was the main reason why both sides were unable to complete the talks, Deng added.

TSAI-XI MEETING: The likelihood of a meeting between Tsai and Xi is “not strong,” MAC Minister Andrew Hsia (夏立言) said on Tuesday, attributing the slim chances to the lack of consensus on a political foundation acceptable to both sides.

BEIJING RAILWAY LINK PROPOSAL: China unilaterally listed building a “Beijing-Taipei high-speed rail corridor” in its five-year plan to be accomplished by 2020. The plan was unveiled at the Chinese National People’s Congress that opened last Saturday. On Monday, ARATS Chairman Chen Deming highlighted the need for both sides to settle political issues as a precondition for discussions on the link. In Taipei, MAC Minister Andrew Hsia said the plan was implausible-not only in terms of technology, but also “because Taiwan has a say in it.”

LANGUAGE FOR OVERSIGHT BILLS: Proposed supervisory regulations governing negotiations with China should avoid any language downplaying national sovereignty, which could result in the misunderstanding that Taiwan belongs to China, campaigners said last Friday.



MILITARY POLICE SCANDAL: Internet phishing and a warrantless search by military police of a civilian’s residence to seize three documents pertaining to White Terror cases that authorities alleged were “classified” ignited a political firestorm. The scandal also raised alarm on the leak and preservation of old classified government documents after a collector came forward claiming he has a collection of more than 1,000 similar documents.

As the Ministry of Defense (MND) was being grilled by legislators across party lines for its evasive and inconsistent accounts of the incident, which was exposed on Sunday, the MND’s Political Warfare Bureau confirmed in the legislature on Wednesday that the Military Security Brigade, a military intelligence unit, was behind the planning and approval of the operation.

In response to public uproar, Premier Simon Chang (張善政) requested that the MND temporarily remove officials involved from their posts pending a probe, while the Presidential Office released a statement saying that President Ma was is “extremely concerned” about the case.

The ministry issued an apology on Monday while defense minister Kao Kuang-chi (高廣圻) said he would “assume political responsibility” if the ongoing investigation unearthed evidence that the ministry was at fault in the case. On Wednesday the ministry said it had initial demoted and transferred two officers who are now under judicial investigation.

MA-TSAI, TSAI-SOONG MEETINGS: President-elect Tsai Ing-wen on Wednesday said that communication would be made with the Presidential Office regarding a Ma-Tsai meeting after Ma wraps up his Central American trip to Guatemala and Belize from March 13-19.

Separately, Tsai met People First Party (PFP) Chairman James Soong (宋楚瑜) to exchange views on a range of issues, marking their first meeting following the Jan. 16 elections. The meeting was reportedly the first leg of Tsai’s post-election visits to heavyweight politicians. Amid speculation that Soong could be picked to head the Straits Exchange Foundation, Tsai said the meeting did not touch on personnel issue. Soong, however, said that Tsai should not to limit her selections for personnel appointments to a “narrow field” and added that his party would surely play a role “in the joint pursuit of a new horizon under Tsai’s leadership.”

MA US TRANSIT: The U.S. Department of State is leaving open the possibility of Ma meeting U.S. government officials during his transits in Houston and Los Angeles en route to Guatemala and Belize, as the U.S. wants to engage in dialogue with Taiwan, deputy spokesman Mark Toner said on Tuesday. Minister of Foreign Affairs David Lin (林永樂) said that Ma would meet with expatriates and members of U.S. Congress when his airplane refuels in Houston and during a stop in Los Angeles.

DPP Legislator Lo Chih-cheng (羅致政) estimated that Ma’s trip, which will take place two months before the end of his term, would cost NT$80 million (US$2.43 million), over half of the government’s annual budget for state visits. Lo described the spending spree as of “questionable legitimacy because it leaves little room for the next president to conduct diplomatic trips.”

JAPAN-TAIWAN RELATIONS UNCHANGED: Taiwan’s imminent transition of power will not affect its longstanding relations with Japan as Tokyo looks forward to the continuation of cooperation with Taipei, Japanese parliamentarian Nobuo Kishi, the younger brother of Japanese Prime Minister Shinzo Abe, said on Tuesday.

TAIWAN-JAPAN FISHERY TALKS: The fifth Taiwan-Japan bilateral talks on fishing rights concluded that fishermen from both sides would continue to abide by existing fishing regulations. The demands made by Okinawa Island fishermen to unilaterally exclude Taiwanese fishing boats from a designated area near the Diaoyutais was not addressed in the meeting, said the Ministry of Foreign Affairs last Friday. The delegations agreed to convene two more meetings before next year’s bilateral fisheries committee talks to discuss the issues regarding fishing rights north of the Yaeyama Islands in the East China Sea and the retrieval of fishing equipment, the ministry said.

KMT ASSETS: The KMT caucus on Thursday said it would participate in the review of a bill on party assets in the legislature “with a selfless, open and people-first attitude” and called on the party headquarters to return the assets to public interest groups or the government after deducting current and retired party workers’ pensions. KMT Administration and Management Committee director Lin Yu-hsien (林祐賢) said that as of Dec. 31, 2015, the net worth of the party assets was about NT$16.6 billion (US$501.8 million), most of which were illiquid assets. Lin denied a rumor that KMT party assets totaled more than NT$100 billion, saying that the highest figure ever was about NT$91.8 billion, of which at least NT$42.7 billion had been lost in the Asian financial crisis after former president Lee Teng-hui (李登輝) of the KMT ordered the assets be used to bail out corporations.

KMT MEMBERS PUNISHED: The KMT’s Central Standing Committee on Wednesday approved disciplinary action against 31 party members who openly campaigned for the DPP’s Tsai Ing-wen during her presidential campaign, with measures that require either expulsion from the party or revocation of membership.



INTERPOL OBSERVER BID: The U.S. Senate on Tuesday unanimously passed a bill that mandates the secretary of state to develop a strategy to help Taiwan obtain observer status in the International Criminal Police Organization (Interpol), where Taiwan lost its membership in 1984 following the People’s Republic of China’s application to join the organization.

SUSPECTS IN CORRUPTION CASE RELEASED: Most suspects detained for overnight questioning by Taipei prosecutors for alleged corruption in a NT$10 billion Coast Guard Administration shipbuilding contract with Kaohsiung-based Jong Shyn (中信造船集團) were released last Friday. In the face of allegation by investigators that helipads on deck of two administration patrol ships -built by Jong Shyn and have already been commissioned-did not undergo testing and were not certified, the company defended its reputation, insisting that the accusations were groundless.

NAVAL SHIPBUILDING POLICY: During a closed-door meeting with more than 20 shipbuilders in Kaohsiung on Thursday, president-elect Tsai Ing-wen said she was determined that military naval vessels be built locally.



EXPORT ORDER DECLINE: Taiwan’s exports declined 11.8 percent year-on-year to US$17.78 billion last month amid weak global demand, marking a fall for the 13th-straight month and the nation’s longest export slump since the global financial crisis, the Ministry of Finance said on Monday.

CNS REVIEW ON HOLD: The Investment Commission on Wednesday said that in line with a request by lawmakers it would suspend its review of Morgan Stanley Private Equity Asia IV’s (MSPE Asia) application to acquire local cable TV operator China Network Systems Co (CNS, 中嘉網路) until the new government takes office on May 20. Far EasTone Telecommunications Co (FET, 遠傳電信), Taiwan’s No. 3 telecoms operator with which MSPE Asia has a strategic alliance, is expected to expand its digital foothold in Taiwan as a result of the acquisition bid. The deal raised lawmakers’ concerns due to FET’s allegedly close ties with the KMT and suspected Chinese capitals respectively in FET and MSPE Asia.

QUASI-SOVEREIGN FUND? The Tsai Ing-wen administration is considering a plan to set up a new quasi-sovereign wealth fund with local and overseas money to finance emerging industries, said Kung Ming-hsin (龔明鑫), a top adviser to Tsai on industry policy who is rumored to be a candidate for the incoming administration’s economic minister.



NUCLEAR SITE SUSPENSION: Operations at two nuclear power plants in New Taipei City could be suspended in June next year as waste disposal reaches capacity and approval for additional repositories seems unlikely, the Atomic Energy Council said on Wednesday.

FLU THREAT: The nation is experiencing its highest weekly number of flu-related deaths in five years, with 37 deaths confirmed last week alone, the Centers for Disease Control said.

FREEDOM OF EXPRESSION: National Chengchi University Student Affairs Office deputy director Tsai Yen-lung (蔡炎龍) apologized last Friday to more than 100 student protesters who were angered by the the school administration’s forced removal the previous week of fliers about victims of the 228 Massacre. Tsai’s insistence that his remarks did not represent the school administration further angered the protesters.

AIRPORT MRT POSTPONED (AGAIN): The launch of an MRT system connection between Taiwan Taoyuan International Airport and the greater Taipei area has once again been postponed, marking the sixth delay since the project was announced in 2002. The failure of several test items to meet contract standards, the main reason for the airport line’s latest delay, could push back its opening to the end of the year, the Ministry of Transportation and Communications said.


The Taiwan Insider is a weekly feature prepared by the Thinking Taiwan Foundation’s Chris Wang, Serena Chuang 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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