TAIWAN INSIDER Vol. 1 No. 4

Welcome to this week’s issue of the Insider. During the past week, the tainted oil scandal has dominated the headlines. The controversy also has political implications for President Ma Ying-jeou (馬英九) and Beijing because of the business tycoons involved.

== EDIBLE OIL SCANDAL

The latest tainted oil scandal involves two business groups — Ting Hsin International Group (頂新國際集團) and Namchow Chemical Industrial Co (南僑化學工業), both well-known food and oil manufacturers in Taiwan. Ting Hsin’s subsidiaries allegedly manufactured cooking oil with oil meant for animal feed while Namchow falsely reported imported oil as industrial-grade, avoiding rigorous inspection procedures required for edible oils.

Major developments:

• While the tainted products have all been removed from the shelves, consumers across the country have launched a boycott of all Ting Hsin Group products, including Taiwan Star Telecom Corp (台灣之星), a local 4G operators, and the Wei family’s largest investment project in Taiwan.
• At the center of the storm is Wei Ying-chun (魏應充), who resigned from his posts as chairman of Ting Hsin International Group, Cheng I Food and Wei Chuan Foods last week. Wei announced on Thursday that the group would pull out of the oil-manufacturing market in Taiwan altogether and would donate NT$3 billion (US$98.65 million) for the establishment of a private food safety committee. At the time of publishing, a court is set to determine whether Wei will be detained.
• President Ma said after an interagency meeting that a food safety office would be established to tackle food safety issues, including investigations into related cases.
• The opposition has called for Premier Jiang Yi-huah (江宜樺) to step down for the government’s “slow reaction” to the three waves of food safety scandals in the past year. Jiang apologized for the incident but has refused to step down.
• Local banks said they plan to freeze credit to Ting Hsin.
• After staying on the sidelines for several days, Beijing’s state-run media began criticizing Wei, who made fortunes by manufacturing instant noodles in China and made most of his investment in the country.
• The Wei family’s political connections have also been in the spotlight, with the Chinese-language Next Magazine reporting on Wednesday that Wei Ying-hsin (魏應行), one of four Wei brothers, had met Ma in the Presidential Office for an agricultural platform to export Taiwanese agricultural products to China without customs inspection. The magazine reported that Ma had sent Council of Agriculture Minister Chen Bao-ji (陳保基) to meet with Wei and Chinese official Zheng Lizhong (鄭立中), deputy chairman of China’s Association for Relations Across the Taiwan Strait, at the Ting Hing headquarters at Taipei 101 Building.
• Chinese Nationalist Party (KMT) spokesperson Charles Chen (陳以信) has denied that KMT candidates had accepted political donations from Wei Ying-chun, deputy director of a support group for Ma’s 2012 presidential campaign, in 2010, and during Ma’s presidential campaign in 2012.
• Several KMT lawmakers expressed concerns of a potential backlash, saying it could have a negative impact on the party’s performance in the 9-in-1 elections next month.

== POLITICS

WOLFOWITZ URGES US SUPPORT: US-Taiwan Business Council Chairman Paul Wolfowitz wrote in the Wall Street Journal on Oct. 9 that the U.S. should “take more ambitious steps” to support Taiwan rather than offer “periodic statements of support.”

The former deputy secretary of defense said that Taiwan’s future has been imperiled by a lack of U.S. support to “counter Taiwanese fears of economic marginalization or to balance the pressure of China’s military buildup and its refusal to renounce the use of force” against Taiwan. He also urged Washington to delink the pork issue and the bilateral investment agreement (BIA) and Taiwan’s inclusion in the Trans-Pacific Partnership (TPP).

APEC MOU DENIED: Department of International Organization Deputy Director-General Catherine Hsu (徐詠梅) denied the existence of a memorandum of understanding (MOU) regarding Taiwan’s participation in the APEC Summit after China’s Taiwan Affairs Office spokesperson Fan Liqing (范麗青) said that Ma’s decision to send former vice president Vincent Siew (蕭萬長) to Beijing was based on the MOU.

MA HIGHLIGHTS ARMS SALES: During his meeting with a delegation from the U.S. Congressional Taiwan Caucus, Ma highlighted Taiwan’s need for advanced fighter aircraft and submarines.

ALLEGED CHINA BOOK BAN: A message circulating on the Internet said that books by Taiwanese novelist Giddens Ko (柯景騰) and Chinese American historian Yu Ying-shih (余英時) have been banned by the Chinese government because both writers have expressed support for the democratic movement in Hong Kong. The news has not been confirmed and Taiwan’s Ministry of Culture refused to comment.

VOTE-BUYING IN 2008? China Production Party (CPP, 中國生產黨) honorary chairperson Lu Yuexiang (盧月香) said during a rally for KMT Taipei mayoral candidate Sean Lien (連勝文) that she had paid for China-based Taiwanese businesspeople to return to vote for Ma during the 2008 presidential election. Lu, who has lived in Taiwan for 22 years and established the party in 2009, said she paid for the expenses of more than 8,000 people in 2008 but retracted her comments later, saying she only “helped a number of people.”

The CPP, which is composed of Chinese spouses married to Taiwanese, now boasts about 40,000 members and has become a political force in Taiwan. The party, which usually aligns itself with the pan-blue camp and supports unification with China, says it plans to nominate its own candidate in the 2016 legislative elections.

MISSING AID: The Ministry of Foreign Affairs (MOFA) has launched an investigation into reportedly missing aid of about US$1.5 million it had offered the government of Kiribati, one of Taiwan’s 22 diplomatic allies, for the procurement of a transport vessel, the ministry said. It has demanded an explanation from the Kiribati government. Radio New Zealand International first reported the news on Tuesday.

HAU DENIES PREMIER RUMOR: Taipei Mayor Hau Lung-bin (郝龍斌) on Thursday denied a rumor that he would replace Jiang Yi-huah (江宜樺) as premier, calling the rumor was “groundless” and adding that it was not the right time to discuss such an issue.

Speaking of the premier, Jiang now has the highest disapproval rate (66 percent) among the last three premiers, according to a survey conducted by Taiwan Indicator Survey Research (TISR). The previous two were Sean Chen (陳冲) and Liu Chao-hsiuan (劉兆玄).

== SOCIETY

SHIPWRECK IN PENGHU: Two researchers died and 25 were injured in a shipwreck Friday night when the 2,700-ton RV Ocean Researcher 5, the largest ship under the Ministry of Science and Technology’s National Applied Research Laboratories for marine research, sank in stormy waters near Penghu. All 45 people on board — 27 researchers and an 18-member crew — were accounted for. The cause of the accident is under investigation.

EBOLA SCARE: A suspected case of the Ebola virus in Taiwan turned out to be a false alarm after the Centers for Disease Control (CDC) said a 45-year-old Nigerian woman who arrived on Oct. 2 from Nigerian capital of Abuja on a business trip had tested negative. The centers said Taiwan would not raise its Ebola control level at the moment.

== MILITARY

CONFERENCE ON SEA LINES OF COMMUNICATION: Dozens of international and local experts gathered in Taipei to discuss maritime security and cooperation in the Asia-Pacific region in the two-day Sea Lines of Communication Conference organized by Taiwan’s Navy.

Notable participants included Randall Schriver, president and chief executive officer of the U.S. think tank Project 2049 Institute; Mark Stokes, executive director of the Project 2049 Institute; and Yoshida Masanori from Japan, as well as foreign officials posted in Taiwan, according to the Navy.

Meanwhile, an anonymous Navy official told the Central News Agency on the sidelines of the conference that Taiwan will complete a design blueprint for a submarine by the end of this year.

DPP MEETS US DEFENSE INDUSTRY REPS: Senior Democratic Progressive Party (DPP) officials held talks with U.S. defense industry representatives and Washington officials about the development of Taiwan’s indigenous defense industry, one of the party’s core defense policies.

DPP Representative to the US and Secretary-General Joseph Wu (吳釗燮) and New Frontier Foundation Defense Policy Advisory Committee convener York Chen (陳文政) told a press conference that their conversations were “very fruitful,” but declined to reveal who they met.

SPY NEWS: The Supreme Court on Monday upheld a five-year prison term for former military intelligence officer Chen Shu-lung (陳蜀龍), who was found guilty for spying for China. Defense News had more to say on the matter with a rather pessimistic report on recent cases.

Also on Thursday, the Ministry of National Defense (MND) appeared to have cleared Army Major General Li Hsien-sheng (黎賢聖) of his alleged spy work for China by naming Li the commander of the Army’s Armor Training Command. MND spokesperson David Lo (羅紹和) said that no evidence had been found to prove that Li had leaked confidential information.

Li was removed from his post of director in charge of Taiwan’s defense mission in Washington after failing a number of lie detector tests. Li reportedly had an extra-marital affair with a Chinese woman, who conducted espionage missions in the U.S., during his stint in Washington.

ARMED SHIPS ON ITU ABA: Taiwan is considering stationing armed vessels permanently on Taiping Island (Itu Aba), the largest island in the Spratlys, Reuters reported.

== ELECTIONS

TISR POLLS IN TAIPEI, TAICHUNG: According to the latest polls conducted by the Taiwan Indicator Survey Research (TISR), a private polling institute, independent Taipei mayoral candidate Ko Wen-je (柯文哲) is enjoying comfortable lead over the KMT’s Sean Lien (連勝文) in Taipei while DPP candidate Lin Chia-lung (林佳龍) has a slight advantage against incumbent Jason Hu (胡志強) of the KMT in Greater Taichung with about 40 days to go in the elections.

Key data in Taipei survey:

• Support rates: Ko 33.8%, Lien 24.4%, Neil Peng (馮光遠) 3.9%, with 12.6 percent saying that they will not vote and 25.9 percent not giving answers.
• Ko has large leads in the 20-49 age groups while most people above age 50 favor Lien.
• Ko has the support of 85.4% of the pan-green camp supporters while Lien has only 59.4% among pan-blue supporters.
• TISR concluded that Ko is leading Lien by between 20 and 30 percentage points.

Key data in Taichung survey:

• Support rate: Lin 32.2%, Hu 29.8%, with 10.4% saying that they will not vote and 27.6% not giving answers.
• Lin holds an advantage of 7.4% (35.9%:28.5%) over Hu in the old Taichung City region, but trails Hu by one percentage point (30.7%:29.7%) in the old Taichung County region. [Note: Taichung City and Taichung County were merged into Greater Taichung as a special municipality in 2010.]
• The institute estimated Lin would beat Hu by between 6.6 and 18 percentage points in the Nov. 29 poll.

DPP COULD MAKE GAINS: Citing nationwide TISR polls, The Journalist magazine said the DPP could win 9 of the 22 constituencies in the mayoral and commissioner elections next month, with the KMT securing 11 and two seats going to independents.

• KMT: New Taipei City, Taoyuan County, Hsinchu County, Hsinchu City, Miaoli County, Changhua County, Nantou County, Chiayi City, Taitung County, Kinmen County, Lienchiang County (Matsu)
• DPP: Keelung, Yilan County, Taichung City, Yunlin County, Chiayi County, Tainan City, Kaohsiung City, Pingtung County, Penghu County
• Independents: Taipei City, Hualien County

TAIPEI ELECTION TV DEBATES: The Ko and Lien campaign offices have agreed to participate in a televised debate hosted by SET-TV. More televised debates hosted by other television companies, including Formosa TV, NextTV and China Television (CTV), are still in the works and will require letters of consent from both campaigns.