Fortnightly Review

Fortnightly Review

Fortnightly Review

KMT Primary Heats Up as Billionaire Joins the Race

A month after former premier Lai Ching-te (賴清德, b. 1959) dropped a political bombshell and announced that he will challenge his party’s incumbent in the presidential office to serve as the ruling Democratic Progressive Party’s (DPP) candidate in the 2020 elections, a billionaire tycoon announced that he will be competing in the main opposition party’s presidential primary. In an already unpredictable race that is pitting a struggling incumbent faced with a contested primary and a resurgent opposition party just became even more complex as the crowded field of candidates in the Nationalist Party (Kuomintang, KMT) was joined by Terry Gou (郭台銘, b. 1950). The chairman of the multinational information-technology powerhouse FOXCONN (Hon Hai Precision Industry Co., Ltd.) —at the urging of the “sea goddess” Matsu—announced on April 17 that he is throwing his hat into the presidential ring.

Opinion Polls

While Chairman Gou’s announcement came as a surprise to many political observers, the fact that the billionaire wants to run should not be entirely unexpected. Indeed, Gou may have been entertaining the idea to  run for the highest office as early as 2017 after the KMT’s landslide defeat in the 2016 elections. Leading KMT figures at the time even floated the idea of drafting Gou. According to an EBC poll (東森新聞) conducted at the time that asked respondents whom they would vote for as president in a match-up between Tsai Ing-wen and Terry Gou released in May 2017, Gou was already polling ahead and received 35.7 percent of votes whereas Tsai received 24.2 percent, with 22.5 percent not expressing an opinion. Among the respondents, more people between the age of 20 and 29 supported Tsai Ing-wen (蔡英文, b. 1956) at 35.8 percent, compared to Gou’s 28.0 percent. Whereas of the age group between 40-49, Gou received 46.0 percent and Tsai 17.2 percent of support.

According to a more recent public opinion poll by Shih Hsin University (世新大學) released on April 18 titled “Public Opinion Survey on the 2020 Presidential Election,” which was conducted after Gou announced his intent to run, support for the KMT candidates broke out as follow: Han Kuo-yu (韓國瑜, b. 1957) with 29.8 percent, Terry Gou 29 percent, and non-responses  41.2 percent. Gou received higher support among men, voters between 20-39 years of age, and those with specialty school and university degrees; whereas the populist mayor of Kaohsiung received higher support among women, people 50 years old and above, and from voters with lower educational attainments. According to the polls, in a potential two-way match up between Gou and Tsai, support for Gou would be 50.2 percent while Tsai’s is predicted at 27.1 percent. If the DPP nominates Lai, Gou’s support rating would drop to 42.6 percent and Lai would receive 33.6 percent of votes. In a three-way race between the DPP, KMT, and the independent mayor of Taipei, Ko Wen-je (‎柯文哲, b. 1959), in which Tsai is the nominee, Gou’s support rating falls further to 35.6 percent, with Ko receiving around 25.2 percent, and Tsai 27.1 percent of the votes. If Lai is the nominee, then Gou would receive 32.1 percent, Ko 25.8 percent, and Lai 23 percent. The poll was conducted by telephone interviews on April 17 with a sample size of 1,068 citizens at or above 20 years old.

According to another public opinion survey conducted by the KMT-leaning United Daily News, 26 percent of respondents still wants the Kaohsiung mayor to run for president, 19 percent supports Gou, 13 percent prefers Eric Chu (朱立倫, b. 1961), and 11 percent wants Wang Jin-pyng (王金平, b. 1941). According to the UDN poll, among KMT supporters, Han has a significant lead as their preferred presidential candidate with 48 percent of respondents supporting Han, and 23 percent wanting Gou to run. Among DPP supporters, the breakdown of support is as follows: 26 percent for Wang, 17 percent for Gou, 16 percent for Chu, and 7 percent for Han. Han and Gou are reportedly polling in lockstep among centrist voters. In terms of the demographic of supporters, Han is reportedly polling higher than Gou among women, people 40 years old and above, and those with junior college degrees or below. Whereas Gou is polling higher among people below the age of 40 and those who have obtained college degrees or higher. Further, the poll revealed a percentage of die-hard supporters of the Kaohsiung mayor. Whereas 22 percent would be willing to vote for Wang if Han did not run, and 6 percent would vote for Chu or Gou, at least 4 percent said that they would only vote for Han and no one else.

KMT’s Primary Process

Despite receiving high marks in public opinion polls, whether Gou will in fact be the KMT’s candidate is far from a done deal. The chairman would of course have to first win the party’s  primary election. The KMT held its first presidential primary election in 2015 and the procedures are both obscure for outsiders and not without controversies. The Central Standing Committee of the KMT currently nominates its presidential candidate in a closed-primary process according to a weighted scale which is based on two factors: 1) an internal election by party members, and 2) public opinion polls. The internal election results reportedly account for 30 percent of the final decision, and the polls account for 70 percent.

To register for the KMT primary, candidates have to submit their application (領表登記), along with 15,000 party members’ signatures (黨員連署). In the 2015 primary election, KMT also required the candidates to obtain 30 percent of the support rate in public opinion polls in order to participate in the primary. In 2016, the party’s controversial presidential candidate, Hung Hsiu-chu (洪秀柱), legitimately won the KMT primary and therefore became the official candidate to run in the 2016 presidential election. However, the KMT’s Central Standing Committee, in a last ditch effort to salvage the party’s electoral prospects, reverted their decision and “drafted” (徵招) then New Taipei-mayor Eric Chu , who was very reluctant to run as the KMT’s candidate. While the KMT announced that they would follow the procedure established in 2015, members of the central committee also stated that they are considering to “draft” Kaohsiung mayor Han Kuo-yu (韓國瑜) to run for the primary without him having to file an application or to fulfill other prerequisites for registration (徵招領表). The final result for KMT’s primary is set to be released this July. The prospect of “drafting” Han, which does not follow formal procedures, would probably sit uncomfortably for some party members given the 2016 incident.

Impact on KMT Internal Politics

After the KMT flirted with a shift towards a more radical orientation following its devastating defeat in the 2016 presidential and legislative elections as embodied by the party’s initial 2016 presidential candidate, the election of its current chairman Wu Den-yih (吳敦義, b. 1948) back in May 2017 was heralded as the party’s return to a more mainstream orientation. The apparent resounding victory for the “establishment wing” of the KMT was seemingly reinforced by the party’s overwhelming electoral success in the 2018 local elections. This success suggested that Wu is at least a strong contender to be the party’s candidate for 2020. Yet, the incredible surge in popularity of the current Kaohsiung mayor—who interestingly received no significant political support from the KMT establishment—became the main story of 2018 and probably derailed those expectations.

With the billionaire Gou now having decided to enter the fray—both Han and Guo are far from establishment candidates (as noted in this Financial Times article, “68-year-old Mr. Gou has a huge ego, paired with a sense of mission and deep contempt for mainstream politicians”)—understandably, this could cause some resentment and perhaps concerns among the establishment wing of the KMT. Immediately after Gou announced his candidacy, some party members called on the KMT Central Committee to establish clear rules for the party’s primary. Eric Chu has been waiting patiently after falling on the sword for the party in 2016 and would be looking to redeem himself in 2020. It is perhaps no surprise that he was the first serious contender to announce his candidacy to be the KMT’s presidential candidate. Now that both Han and Gou are dominating the public opinion polls, it is possible that the establishment wing of the Party may once again become marginalized within the KMT.

The main point: In an already unpredictable race that pitted a struggling president facing a contested primary with a resurgent opposition party, the road to the presidential election in 2020 became even more complex as the Nationalist Party’s primary became even more crowded with FOXCONN Chairman Terry Gou’s announcement to run in the KMT primary.

PRC Reinvigorates Push for “Cross-Straits Common Market” Ahead of Taiwan’s 2020 Presidential Election

On the sidelines of the Boao Asia Forum (博鰲亞洲論壇), which was held late last month from March 26 to March 29, the director of the State Council’s Taiwan Affairs Office (TAO) Liu Jieyi (劉結一)—who is in charge of policy implementation set by the Chinese Communist Party (CCP) towards Taiwan—met the former vice president of Taiwan, Vincent Siew (蕭萬長). Mr. Siew was leading a delegation of Taiwan businessmen to attend the annual forum. According to media reports, Liu invited Siew for dinner ostensibly for the purpose of pushing forward the creation of a “cross-Straits common market” (兩岸共同市場).

The concept of a “cross-Straits common market” is not new and has been around since the 2000s. In 2001, as cross-Strait relations hit an impasse at the beginning of the first Democratic Progressive Party (DPP) administration, the idea was put forward by Vincent Siew, who had served as premier from 1997-2000 and was then the vice chairman of the KMT, ostensibly for the purpose of defusing political tensions and focusing on economic integration. Siew even paid a visit to Washington, DC to promote the idea in 2001, highlighting how the European Union inspired his idea for the cross-Strait common market at an event at a prominent DC think tank. Siew reportedly “stressed that a similar economic arrangement across the Taiwan Strait might allow Beijing and Taipei to move toward political integration.” To promote the institutionalization of the concept, Siew established the Cross-Straits Common Market Foundation (兩岸共同市場基金會) in 2001.

In his opening remarks at the dinner, the director of the TAO reportedly stated that the “present situation of cross-Strait relations is severe and complicated, and the road ahead will not be smooth sailing. However, when the great way prevails, the will of the people are unstoppable. I hope that everyone will grasp the historical trend, share the overall national interest, and jointly promote the peaceful development of cross-Strait relations.”

Liu’s remarks were echoed by Zhang Zhijun (張志軍), the director of the Association for Relations Across the Taiwan Strait (ARATS)—which is a semi-governmental organization charged with conducting relations with Taiwan’s counterparts (i.e., the Strait Exchange Foundation) in the absence of direct governmental contacts—in his remarks to businessmen from Taiwan who attended the panel at the Boao Forum. When referring to the Taiwan businessmen, Zhang stated “you have to work proactively, to create positive conditions for the final creation of a true common market.”

The Boao Forum is an annual international forum that the PRC has hosted since 2002. The forum—which is commonly referred to as the “Asian Davos”—has held its annual conference in Hainan province since 2002. In the midst of the ongoing US-China trade war and in an apparent dig on the current US administration’s approach to trade, which eschews multilateral initiatives for bilateral initiatives, the themes for this year’s conference were “open economy, multilateral cooperation, and innovation.”

During the Boao Forum panel on “Cross-Strait Enterprise Roundtable” (兩岸企業家圓桌), the ARATS director raised three points: First, for the people to recognize the general trend of China and the world, and that judging from history, China has always exceeded its five-year plans. Zhang added that since the people on the two sides are family, if Taiwan relies on China then it will be the “waterfront pavilion [that] gets the moonlight first” (近水樓台先得月), meaning that a person in a favorable position gains special advantages. He also added that Taiwan must have strategic strength and strategic confidence in this historical trend.

Second, Zhang called on the Taiwan businesses to grasp Chinese policy and seize the opportunity. Zhang said that the businessmen from Taiwan should seriously study the development thinking of the Chinese government, understand what the future is focused on, and what areas have opportunities. Specifically, he highlighted Taiwan’s industrial advantages such as its semiconductors, machine tools, biotechnology, modern service industries, and quality agriculture, and pointed out that China’s advantages are its market and the internet economy.

Third, the ARATS director said that the two sides should strengthen communication and hold more seminars and forums to strengthen mutual understanding. Zhang further said, “If cross-Strait political relations can be fundamentally changed, it can create favorable conditions for the development of economic and trade relations.” He then called on Taiwan businessmen, “You must act positively to create a favorable common market and create a favorable future condition.”

The “cross-Straits common market” is not a new idea as the notion of a common market had been put forward nearly two decades ago. While the political undertones of the concept have been here from the very beginning, it seems evident now from the comments of CCP senior leaders that the Chinese side is reinvigorating the push as they see the cross-Strait common market as a possibility to influence the upcoming elections in Taiwan.

The main point: Senior CCP leaders are pushing for a “cross-Straits common market.” The timing of the push, in the lead up to the 2020 presidential elections in Taiwan, suggests that it may be intended to influence the upcoming elections in Taiwan.