China-Taiwan Weekly Update, October 5, 2023

Editors: Dan Blumenthal and Frederick W. Kagan of the American Enterprise Institute 

Data Cutoff: October 4 at 5pm ET 

The China–Taiwan Weekly Update focuses on the Chinese Communist Party’s paths to controlling Taiwan and relevant cross–Taiwan Strait developments. 

Key Takeaways   

1. The Kuomintang (KMT) and Taiwan People’s Party (TPP) could form a joint presidential ticket before the January 13 election.
2. Online activist Lin Yu-hung reportedly requested that death threats be made against himself related to the imported egg scandal, shifting the electoral narrative away from cross-strait relations this week. The dominant narrative of the election as a choice between peace and war is likely to reemerge in the next week, however.
3. Sino-German economic agreements on October 1 demonstrate that the CCP is utilizing international governmental agreements to offset the image of a poor business environment in China.

Taiwanese Presidential Election

The Kuomintang (KMT) and Taiwan People’s Party (TPP) could form a joint presidential ticket before the January 13 election. The KMT aims to overcome its third place standing in the presidential race by partnering with the second place TPP to create a competitive challenge to the leading Democratic Progressive Party presidential candidate Lai Ching-te.[1] KMT Chairman Eric Chu and KMT presidential candidate Hou Yu-ih both separately expressed a willingness to work with the TPP in late August.[2] Several local district level KMT leaders called for cooperation between Hou and Ko on September 20.[3] ISW previously assessed on September 29 that the KMT and TPP were unlikely to obtain a compromise deal because KMT-leaning Broadcasting Corporation of China Chairman Jaw Shaw-kong insisted on preconditions to negotiations in September.[4] Jaw’s precondition that KMT presidential candidate Hou Yu-ih be the nominee on a joint ticket amounted to a call for TPP presidential candidate Ko Wen-je to drop out of the race. [5] Ko responded on September 30 by calling for an independent third party poll to determine the presidential candidate on a joint KMT-TPP ticket. [6] Ko called for this approach because he currently leads Hou in the polls. There is no precedent in Taiwanese politics for determining a presidential ticket via this method between two parties. The KMT has neither publicly agreed to this suggestion nor publicly engaged Ko about any such poll since September 30.[7] Chairman Eric Chu made a statement on October 4 expressing willingness to engage in dialogue with the TPP without preconditions, removing the obstacle to cooperation presented by Jaw’s demands.[8] Neither Hou nor Ko has shown a willingness to drop out of the race. It remains unclear how the two parties would choose a presidential candidate for a joint ticket or resolve dissimilar policy views about mechanisms, such as the 1992 Consensus, for engaging with the Chinese Communist Party.[9]

• Ko leads Hou by 7.4 percentage points in the presidential election, according to a September 25 poll by the Taiwan Public Opinion Foundation.[10]

Online activist Lin Yu-hung reportedly requested that death threats be made against himself related to the imported egg scandal, shifting the electoral narrative away from cross-strait relations this week. The dominant narrative of the election as a choice between peace and war is likely to reemerge in the next week, however. The Democratic Progressive Party-led government imported 145 million eggs over the summer to alleviate supply shortages. Several million of these eggs had mislabeled expiration dates, which gave rise to public concern about the safety of the imported eggs. Multiple Taiwanese media outlets reported on October 3 that Lin criticized the DPP over the egg scandal and requested that death threats be privately sent to himself by a friend in the KMT named Hsu Che-pin.[11] The egg scandal is now entering its third week.[12] The media focus on other scandals during this election cycle has generally lasted no more than three weeks. The emerging scandal surrounding former Taiwan naval advisor Kuo Hsi accusing KMT legislator Ma Wen-chun of leaking classified secrets related to Taiwan’s indigenous submarine to the PRC is also pushing the electoral narrative back to national security and cross-strait policy.[13] The multi-year trend of cross-strait relations shaping Taiwanese presidential elections, along with the emerging national security-related scandal, suggests that the narrative of the election as a choice between peace and war will be the central issue of the 2024 presidential election.

• The DPP-led government imported the eggs between March to July to address shortages caused by the avian flu.[14] Egg processing plants mixed imported and domestic eggs to create liquid egg products and mislabeled the products as made in Taiwan.[15] The government destroyed 54 million eggs that had expired in storage facilities.[16] The agriculture minister resigned on September 17 and Premier Chen Chien-jen responded to the controversy before the Legislative Yuan on September 22.[17]
• Lin stated that he solicited the fake threats because the Kuomintang failed to hold the DPP accountable.[18] Lin also announced that he was a DPP member and planned to resign from the party on October 3.[19] The KMT confirmed on October 3 that Hsu was a KMT party worker and that there would be an investigation into his actions.[20] Both Taiwan Premier Chen Chien-jen and Justice Minister Cai Qingxiang stated on October 3 that they would continue to investigate and search for more accomplices.[21]
• The Taiwanese Ministry of National Defense announced on October 3 that it is cooperating with the judicial authorities to “clarify the facts” regarding the allegation against Ma but will not comment on the situation.[22] Ma filed a defamation lawsuit against Kuo on September 30.[23]

Chinese Communist Party and Europe

Sino-German economic agreements on October 1 demonstrate that the CCP is utilizing international governmental agreements to offset the image of a poor business environment in China. The raiding of foreign firms and exit restrictions from China for select foreign employees since the anti-espionage law came into effect in April projects an image of hostility to foreign investment in China.[24] This aligns with CCP General Secretary Xi Jinping’s contradictory pursuit of increasing private sector growth while simultaneously making the business regulatory environment more stringent on national security grounds since the 20th Party Congress in October 2022. CCP Vice Premier He Lifeng and German Finance Minister Christian Lindner agreeing on October 1 to deepen unspecified financial cooperation buttresses China’s image as a favorable location to do business, which is contradictory to the party’s actions such as raiding foreign firms.[25] The CCP also loosened capital control restrictions in Shanghai throughout September to buttress this image.[26]