KMT reformers finally get some good news–Taiwan Report News Brief transcript

HouYuIh

Summary: A minimum wage hike is planned, but is panned by businesses. Foxconn Chairman says China’s days as the world’s factory are over. Money is flowing back into Taiwan. Controls on Chinese investment to be tightened. Infighting in the KMT, but Johnny Chiang gets a big boost. But up first, lots of headlines.

Headlines

Taiwan will become a super-aged society by 2025, meaning that one in five citizens will be aged over 65, due mainly to a falling birth rate and a fast-aging population, the National Development Council (NDC) reported on Tuesday.
Taiwan is projected to see negative population growth this year.

A Paiwan community in Pingtung County’s Mudan Township (牡丹) is angry after a set of totems carved by a local artist were altered during restoration.
The totems had depicted Paiwan men and women with their lower bodies uncovered.
Feeling that the totems in their original form were indecent, the contractor covered their lower halves with colorful skirts.
The added skirts are also not the type of clothing Paiwan would wear.

After Han Kuo-yu suggested goose eggs helped female fertility at the KMT Kaohsiung mayoral campaign rally, sales of goose products have risen 30%.

Ordinary hotels will be able in the future to accept individuals who need to be quarantined to accommodate heavy demand at the current level of arrivals, the Central Epidemic Command Center (CECC) said Monday.
Taiwan sees up to 2,000 new arrivals per day who need a place to stay during their mandatory 14-day quarantine, with an average of close to 20,000 people in quarantine every day.

An experimental COVID-19 vaccine developed by Taiwanese maker Adimmune Corp. has been given conditional approval to enter human trials, according to Taiwan’s Food and Drug Administration (FDA).

The Taipei Parks and Street Lights Office has decided to proceed with a third appeal against Indigenous singer Panai Kusui and other protesters for violating a park ordinance and not paying fines for their violation.
For more than three years, Panai and her group have staunchly opposed a regulation defining and zoning what can be classified as Indigenous peoples’ “traditional territories and lands” enacted by the Council of Indigenous Peoples in February 2017.

Democratic Progressive Party Legislator Mark Ho (何志偉) is making good on a promise he made last month.
The lawmaker pledged to give away a thousand fried chicken cutlets if the police unearthed any counterfeit stimulus vouchers.
On August 13, police in the central county of Yunlin uncovered an operation that was creating counterfeit stimulus vouchers.

A substantial portion of the NT$230 billion (US$7.8 billion) budgeted by the Executive Yuan for the third phase of the Forward-looking Infrastructure Development Program will be going toward rail construction and the development of 5G infrastructure.
The proposed budget would be divided into two parts: NT$124.1 billion for the next fiscal year and NT$105.9 billion for fiscal year 2022.

The seeds of four plant species chosen by Taiwanese researchers will be heading into space in October as part of an international research project led by the Japan Aerospace Exploration Agency.
After a few months aboard the ISS, the seeds will be sent back to their country of origin and planted to determine if the different radiation levels and gravity found in space affects the seeds in any way.
Taiwan is one of nine countries participating in the project.

The annual Taiwan Automation Intelligence and Robot Show will begin Aug. 19, with displays of robots, industrial components and other devices at 2,800 booths.
Products on display will include various types of service robots, such as home robots and surgical robots, smart living appliances, image recognition tools and machine components.

Legislative Yuan President Yu Shyi-kun (游錫堃) revealed in an interview that he has invited Czech Senate President Milos Vystrcil to the Legislative Yuan during the his visit to Taiwan later this month.
Meanwhile, lawmakers from across party lines yesterday established two parliamentary friendship groups aimed at improving relations with the Czech Republic and Spain at an inauguration ceremony at the Legislative Yuan in Taipei.

The newly opened Taiwan Representative Office in Somaliland is the only overseas office using the term “Taiwan,” the Ministry of Foreign Affairs (MOFA) said Tuesday, describing it as a significant achievement diplomatically.
Taiwan’s de facto embassy in Somaliland formally opened Monday in Hargeisa after Taiwan and Somaliland signed an agreement in February to set up offices in each other’s territory.

Minimum wage hike planned, but panned by businesses

Labor groups on Tuesday praised a proposed minimum wage hike for this year, while industry representatives expressed disappointment, saying that it would create a greater burden for businesses amid the COVID-19 pandemic.
The Basic Wage Deliberation Committee, convened by the Ministry of Labor and comprised of workers, employers and scholars, said Tuesday that the minimum monthly wage in Taiwan should be raised NT$200 (US$6.8) to NT$24,000, while the minimum hourly wage should increase NT$2 to NT$160.
The proposal still needs to be approved by the Cabinet.
If passed, it will apply to all workers in Taiwan except for foreign domestic workers, who are not covered under the Labor Standards Act.

Foxconn Chairman says China’s days as the world’s factory are over

Hon Hai Precision Industry Co. — known also as Foxconn — Chairman Young Liu said it’s gradually adding more capacity outside of China, the main base of production for gadgets from iPhones to Dell desktops and Nintendo Switches.
The proportion outside the country is now at 30%, up from 25% last June.
That ratio will rise as the company moves more manufacturing to Southeast Asia and other regions to avoid escalating tariffs on Chinese-made goods headed to U.S. markets, Liu told reporters after his company reported financial results.
“No matter if it’s India, Southeast Asia or the Americas, there will be a manufacturing ecosystem in each,” Liu told investors on a conference call, adding that while China will still play a key role in Foxconn’s manufacturing empire, the country’s “days as the world’s factory are done.”
That is a remarkably blunt statement, and one I’m sure caused concern in China.
Apple is assembling a series of suppliers to invest in building iPhones in India, with billions being invested by key Taiwanese companies like Hon Hai and Wistron.
Interestingly, the world’s biggest shoe maker that you’ve never heard of, Taiwanese giant Pao Cheng already moved almost all of their international shoe factories out of China a few years ago, leaving only factories supplying the local Chinese market.
They had originally supplied companies like Nike and Adidas from Taichung–where they still have their headquarters a block from my office.
At their peak in China if I recall correctly they essentially had a city of employees–over one million in Guangdong Province.
Now they are mostly supplying from Southeast Asia.
Most materials development and R&D, however, remain in Taiwan, with suppliers scattered through Taichung and Changhua.
For years, companies like Pao Cheng have been filtering out of China due to rising labour costs, high turnover, regulations, IP theft and currency restrictions.
Now the trade war with the US has accelerated that trend.
In related news, the US has tightened restrictions on suppliers of Chinese cell phone giant Huawei, which may mean Taiwanese suppliers may be cut off from a major client.

Money is flowing back to Taiwan

As of Thursday last week, the Ministry of Finance had received applications to repatriate NT$207.6 billion (US$7.03 billion) in overseas funds since a repatriation law took effect on Aug. 15 last year.
The legislature passed the Act on the Use of and Taxation on Inward Remittances of Overseas Funds (境外資金匯回管理運用及課稅條例) in early July last year.
It provides a tax rate of 8 percent in the first year and 10 percent in the second year for repatriated funds, with further reductions to a preferential rate of 4 percent in the first year and 5 percent in the second year if the funds are returned and invested on time.
The regulations remain valid for two years as part of government incentives to help individuals and for-profit enterprises rebalance their international investments and encourage them to return funds to Taiwan.
The ministry had earlier estimated that there would be applications to repatriate NT$133.3 billion in the year following promulgation of the law.
From last month to this month, there were applications to repatriate NT$2 billion to NT$3 billion every day.
In other words, they’re doing far better than expected.

Controls on Chinese investment to be tightened

Chinese investments in Taiwan are to be more strictly regulated under a draft amendment to the Measures Governing Investment Permits to the People of the Mainland Area (大陸地區人民來台投資許可辦法), the Ministry of Economic Affairs has announced.
The amendment would expand the definition of Chinese capital and close loopholes that could be used by investors to skirt regulations on Chinese capital.
“The US, Japan and Germany are all tightening foreign investment requirements for China,” a commission spokesperson told a news conference.
“In Taiwan we have separate laws governing foreign investment from China and the rest of the world, so we are only tightening the laws regarding Chinese investment.”
He also said that the regulatory changes are to determine whether Chinese investors have material control of a company.

Infighting in the KMT, but a boost for Chiang

KMT caucus whip Lin Wei-chou (林為洲) stirred up controversy in the KMT by saying it is time to say goodbye to the “Han wave”, referring to the tide of support that propelled Han Kuo-yu and others into victory in the 2018 local elections.
“Treat it [the Han wave] as a legend,” Lin wrote, adding that the KMT should make changes and work hard to regain the public’s trust.
In an interview later in the day, Lin said Saturday’s loss was a continuation of the party’s defeat in the Jan. 11 presidential and legislative elections.
The “Han wave” had been the KMT mainstream, but that was no longer the case, he said.
The KMT might have to recognize the reality that it can no longer rely on the “Han wave,” which, while it might have helped the party pick up some votes on Saturday, did not have a major effect, he said.
The KMT could not even hold on to its base, proof that the “Han wave” could no longer be seen as the KMT’s “savior,” Lin said.
Naturally, Han’s remaining supporters weren’t happy about this.
The reality is, however, that the Han wave was over long ago and this is a very belated realization.
Han supporters are also unhappy at Chen Chi-mai’s win in the Kaohsiung byelection, and a reportedly already preparing to launch a recall campaign against him.
Beleaguered KMT Chair Johnny Chiang, however, got some good news for a change.
Former KMT Chairman Eric Chu (朱立倫) on Sunday said that the party should not get bogged down in personnel matters at this time and that it should instead focus on “embracing mainstream public opinion and values.”
Instead, he said the party should take the time to reexamine itself, calling this a “laborious and brutal process.”
Essentially what he’s saying is that Johnny Chiang shouldn’t be removed from the chair position, and that Chiang’s focus on reforms is the correct path.
Chu is clearly angling to run for KMT chair again next May, but doesn’t want the job now.
Why would he?
The party is in shambles and the political minefield of getting reforms passed in the party congress lay ahead.
Better to let Chiang take the heat and burn his political capital, then take over when the hard part is done.
But the really significant good news for Chiang is that finally New Taipei Mayor Hou Yu-ih has finally weighed in, on his side.
He flat out said he hopes Chiang will continue to lead, and to continue with his reform campaign.
He also called for party unity, and for the party to return to following public opinion.
Again, like Eric Chu he didn’t directly mention Chiang’s internally controversial plan to finally kill off the 1992 consensus, but like Chu his call to return to what the public will is is clearly a coded way of saying he does.
That Hou spoke up is interesting, he almost never wades into party or national politics, preferring to stick to his job.
Hou is now Taiwan’s most popular politician, and Eric Chu is in the top 10, so they have some influence.
Most of the party heavyweights have already weighed in against Chiang, but now he’s got at least three in his corner, including former legislative speaker Wang Jin-pyng.
But former President and KMT chair Ma Ying-jeou, and other former KMT chairs like Lien Chan, Hung Hsiu-chu and others have openly attacked him.
The battle over party reform in the party congress in September is going to be very interesting to watch.

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Image courtesy of Hou Yu-ih’s Facebook page

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