Week of March 26-April 1, 2016

Rumors about appointments for the incoming Tsai administration abound, but no confirmations yet; President-elect Tsai says she will give priority to an invitation to attend a canal expansion ceremony in Panama, where she could run into Chinese President Xi; President Ma meets with Tsai for the first time since the Jan. 16 elections; former deputy legislative speaker Hung Hsiu-chu elected KMT Chairperson; Hon Hai Precision Industry finalizes its takeover deal with Sharp. Welcome to this week’s edition of the Insider.



FOREIGN AFFAIRS PERSONNEL: Rumors circulated all week about possible appointments in the incoming Tsai Ing-wen (蔡英文) administration. The Chinese-language Liberty Times led the charge with reports that former representative to the U.S. David Lee (李大維) will be minister of foreign affairs. Local media also reported that Taiwan’s representative to Italy Stanley Kao (高碩泰) is to become the representative to the U.S. Meanwhile, several Democratic Progressive Party (DPP) heavyweights will reportedly be posted as top diplomats to important trade partners in Asia and Latin America, including former vice president Annette Lu (呂秀蓮) as ambassador to Panama, former premier Su Tseng-chang (蘇貞昌) as representative to Singapore, former premier Frank Hsieh (謝長廷) as envoy to Japan and former minister of foreign affairs James Huang (黃志芳) as envoy to Indonesia. The DPP, as well as Lu’s office, dismissed the rumors. Huang told media on Thursday that he wasn’t even consulted.

RUMORS DENIED: Former Legislative Speaker Wang Jin-pyng (王金平), now a Chinese Nationalist Party (KMT) lawmaker, denied reports that he will head the Straits Exchange Foundation as hearsay, while Chen Liang-Gee (陳良基), executive vice president for academics and research at National Taiwan University, described on Sunday the likelihood of his appointment to any government post as slim amid reports that he will be named minister of education.



TSAI-XI MEETING IN PANAMA? Tsai Ing-wen promised to give “priority consideration” to an invitation from Panama to attend the opening ceremony of the expanded Panama Canal on June 26, an event to which Chinese President Xi Jinping (習近平) has also invited. Lawmakers expressed bipartisan support for the visit even if the possibility of any meeting between Tsai and Xi remains uncertain. Asked last Friday whether Xi would attend the ceremony and if he might meet Tsai, Chinese Ministry of Foreign Affairs spokesman Hong Lei (洪磊) did not directly respond and instead reiterated Beijing’s “one China” principle as “a fundamental precondition for handling and developing relations with countries around the world.”

PACT-OVERSIGHT BILL: The DPP caucus is likely to put forward a draft bill next week to monitor cross-strait agreements. In a sign that it is trying to meet China halfway, the DPP said the version would not use the word “treaty” in its title as this implies relations “between two countries.”

MA ON UNIFICATION: In an interview with the CNN aired last Saturday, President Ma Ying-jeou (馬英九) said both he and Xi Jinping are well aware that the conditions for the unification of the two sides of the Taiwan Strait are lacking at present. He also asserted that those who opposed his China policy only account for a small proportion in Taiwan. Ma said his administration has created a status quo across the Taiwan Strait that has won the support of the majority — one that even Tsai agreed to maintain. Several DPP lawmakers countered Ma’s claim, saying that Tsai’s definition of “status quo” is quite different from Ma’s as it refers to “neither sides is subordinate to the other” rather than “leaning towards China.”

JUSTICE MINISTER VISITS CHINA: Minister of Justice Lo Ying-shay (羅瑩雪) embarked on a historic trip to China on Monday by becoming the first Taiwanese minister of justice to visit China in an official capacity. The Judicial Foundation, however, said it suspected Lo may have a be “secret agenda” after the ministry refused to disclose her detailed itinerary prior to her trip.

SEF HEAD CANCELS TRIP: Straits Exchange Foundation chairman Lin Join-sane (林中森) canceled his visit to China after the legislative Internal Administration Committee made a resolution calling on Lin to refrain from making such trip and spending government money on travel without its permission, said SEF Vice Chairman Chou Jih-shine (周繼祥) said on Thursday.

PUBLIC VIEWS ON ‘ONE CHINA’: A survey published by the Taiwan Indicators Survey Research on Thursday shows that 63.5% of Taiwanese do not agree that the Republic of China Constitution should continue to list “mainland China” as part of the nation’s territory.



MA-TSAI MEETING: President Ma met with president-elect Tsai on Wednesday for the first time since the Jan. 16 presidential election, during the meeting both sides exchanged opinions on a variety of issues and called for cooperation and a smooth power transfer. Ma and Tsai did not address cross-strait affairs due to time constraints, the DPP said.

HUNG ELECTED KMT CHAIRPERSON: Former deputy legislative speaker Hung Hsiu-chu (洪秀柱) became the first KMT Chairwoman in a by-election on Saturday. Hung will serve out the remainder of New Taipei City mayor Eric Chu’s (朱立倫) term until July 2017. Chu stepped down after his landslide defeat in the Jan. 16 elections. Chu had replaced Hung to become the KMT’s 2016 presidential candidate just months before the election.

Marred with election irregularities, the election had a record-low turnout of 39.39 percent, with Hung gaining 56.16 percent of votes. Hung’s pro-Beijing stance sparked concerns over a potential exodus of party member in support of its localization as well as the party’s popularity among Taiwanese people.

Chinese Communist Party (CCP) leader Xi Jinping congratulated Hung for her victory on Saturday evening, urging the KMT to uphold the “1992 consensus” and oppose Taiwan independence. Hung’s response echoed Xi’s call for the consensus but did not address the issue of Taiwan independence.

US PORK: Kurt Tong, principal deputy assistant secretary for the U.S. State Department’s Bureau of Economic and Business Affairs, said on Wednesday that international standards for the scientific base in setting policies would be the best solution for the long-standing issue of U.S. pork imports containing ractopamine to Taiwan, adding that he did not address the issue in a meeting with Tsai the day before. The U.S. had hinted that Taiwan’s lift of a ban on ractopamine-laced U.S. pork was a precondition for further bilateral trade talks and Taiwan’s inclusion in the U.S.-led Trans-Pacific Partnership (TPP) free-trade bloc.

FUTURE FOREIGN POLICY: DPP Secretary-General Joseph Wu (吳釗燮), who is reportedly to become Tsai’s National Security Council (NSC) secretary-general, said on Sunday that the Ma administration has disproportionately prioritized cross-strait affairs over foreign relations, adding that the incoming administration will formulate strategies to strengthen the nation’s ties with the U.S., Japan, European and other democratic countries.

OBI PHARMA CONTROVERSY: Academia Sinica president Wong Chi-huey (翁啟惠) was embroiled in a political storm this week due to suspected insider trading at OBI Pharma Inc (台灣浩鼎) by his daughter on the day the company learned about the unfavorable trial result of a breast cancer drug.

Wong, who is currently in the U.S. on a business trip, had initially agreed to return to Taiwan and brief the Legislative Yuan on the matter but appeared to have a change of heart. Wong extended his stay in the U.S. and offered his resignation twice, citing health concern and his doctor’s advice against flying. According to the Presidential Office, President Ma did not approve the resignation and has asked Wong to explain and prove his innocence.

Meanwhile, Futai Investment (富鈦投資), a major investor in OBI Pharma owned by Tsai Ing-wen’s brother Tsai Ing-yang (蔡瀛陽), announced on Tuesday its plan to clear holdings of OBI Pharma stock to avoid potential conflicts of interest. The company’s share price dropped by nearly 10 percent on Tuesday following the announcement.

ELECTRICITY RATE DISPUTE: Electricity rates are to be cut by 9.56 percent on Friday as scheduled based on the electricity rate formula passed by the legislature last year, Vice Premier Woody Duh (杜紫軍) said on Monday in response to appeals for a delay by Chang Ching-sen (張景森), executive director of Tsai’s policy office. Chang held that the rate cut would hinder Tsai’s green energy policy. The pan-blue camp characterized his visit to Minister of Economic Affairs John Deng (鄧振中) last Friday to discuss the matter as “illegitimate and beyond his power.”

MALACCA STRAIT INCIDENTS: The Ministry of Foreign Affairs said on Saturday that it has expressed its concern to Indonesia over the Indonesian military vessel’s alleged chase and firing of warning shots targeting a Taiwanese fishing boat in the Strait of Malacca. Local fishermen’s association accused the Indonesian personnel of holding the skipper hostage for US$300 as the ministry’s preliminary report indicated that Taiwanese boat was stopped and boarded for an inspection. The incident occurred after two other Taiwanese fishing boats were fired upon in the same sea area by an Indonesian patrol boat last week. The preliminary report by Taiwan’s Fisheries Agency indicated no sign of illegal fishing activities by the two boats — one of which sustained 17 bullet impacts.

TAIWAN PRESENCE IN MYANMAR: The Taipei Economic and Cultural Office in Myanmar opened in Yangon on Monday to represent Taiwan’s interests in the Southeast Asian nation in the absence of diplomatic relations.

NPP CHAIRMANSHIP: New Power Party Legislator Huang Kuo-chang (黃國昌) was unanimously re-elected as party executive chairman last Friday following repeated delays and rumors of internal party tensions.



HON HAI-SHARP DEAL: Taiwanese manufacturer Hon Hai Precision Industry, a major iPhone assembler, confirmed on Wednesday its US$3.5 billion takeover of struggling Japanese electronics giant Sharp, which supplies iPhone screens. To be officially signed by the two sides on Saturday, the deal is expected to grant Hon Hai access to a greater share of the global smartphone supply chain with the acquisition. The bailout is US$884 million smaller than originally planned before Sharp’s undisclosed liabilities threatened the deal, which was reportedly being completed in February.



JAPAN RADAR STATION: The Ministry of National Defense said on Wednesday that it had taken precautions for the security of military telecommunication after Japan’s new radar station in the East China Sea 150km south of the Diaoyutai Islands (釣魚台) began to operate on Monday. The station will give Japan a permanent intelligence gathering post near Taiwan and a group of islands disputed by Japan and China.

SOUTH CHINA SEA ADIZ: Chances are low that China will declare an air defense identification zone (ADIZ) in the contested South China Sea in the near term, National Security Bureau deputy head Chou Mei-wu (周美伍) said on Thursday, adding that Beijing is still trying to build up its military capabilities in the region. Chou said that while Beijing is still trying to build up its military capabilities, it does not have the ability to identify aircraft passing through the region to establish an ADIZ.

INTRUSIONS BY CHINESE BOATS: The Coast Guard Administration caught a Chinese boat illegally harvesting coral and endangered turtles near the Taiwan-controlled Pratas Islands in the disputed South China Sea, the CGA said on Sunday. Eleven other Chinese fishing boats were dispersed while two small Chinese-registered boats were seized for investigation during the patrols near the island.

COUNTER-TERRORISM: Responding to global terrorist threats, the National Security Bureau revealed on Monday that 35 foreigners labeled as terrorists or on a watchlist were denied entry to Taiwan last year, adding that it intends to introduce legislation to deter Taiwanese people from joining extremist groups. Eight people in Taiwan who have left messages on the IS website are being closely monitored, while there has been no intelligence indicating any Taiwanese national is participating in terrorist organizations, the bureau said.



RANDOM ATTACKS: The decapitation of a four-year-old girl in a random attack in Taipei on Monday has sparked public outrage, leading to assaults against the suspect, an unemployed man with a track record of drug abuse. Despite the victim family’s appeal against exploiting the tragedy for capital punishment debate, the KMT on Tuesday pressured Tsai to explain her stance on death penalty abolition, saying it does not rule out subjecting the issue to a referendum amid calls for mandatory death sentence for child murderers.

Two more unrelated random attacks occurred in Taipei on Tuesday, with one incident leaving a police officer wounded after being stabbed at a Taipei metro station and the other involving a cleaner being injured by a saw-wielding suspect.

COASTAL POLLUTION: A fuel leak involving a cargo ship carrying dangerous materials that ran aground on shoals off New Taipei City’s Shihmen District on March 10 has raised concerns over extensive pollution along a 1.5km stretch of the northern coastline. Environmental Protection Administration Minister Wei Kuo-yen (魏國彥) said on Wednesday that he would resign following a DPP lawmaker’s criticism of his response to the incident. Wei suffered a heart attack during a hearing at the legislature the following day and is in stable condition after undergoing catheterization surgery.


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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