Cross Strait

A China sequel for Spielberg?

A film studio faces scrutiny – despite goodwill in Taipei over spy exchanges

Bridge of Spies

Spies swapped across the Strait too

In May 1960 an American U-2 spy plane was shot down over the Soviet Union. The aircraft’s pilot was later allowed to return home in exchange for Rudolf Abel, a KGB agent captured by the US.

The story will be familiar to those who have seen Steven Spielberg’s Bridge of Spies. But just as the Cold War thriller hit cinemas in October, discussions on another spy swap were taking place across the Taiwan Strait.

The exchange became public after an announcement by both sides this month. However, Taiwanese media had earlier reported that the island’s spies were returned in mid-October, just ahead of the historic meeting between Chinese leader Xi Jinping and Taiwanese leader Ma Ying-jeou in Singapore (see WiC303).

Beijing released Zhu Gongxun and Xu Changguo. Both men were colonels in Taiwan’s military intelligence bureau. Caught on the mainland in 2006, they were given life sentences for espionage.

In return Taiwan gave parole to mainland spy Li Zhichao who, before his arrest 16 years ago, was a Hong Kong resident.

The exchange is a product of the “mutual goodwill delivered by the Ma-Xi meeting,” Ma’s spokesman Charles Chen told Taipei Times. “He [Ma] also hopes that both sides’ good-intentioned interactions can be continued and lead to more concrete results in the future.”

Such a cross-Strait exchange was unimaginable in the 1960s. Huge posters warning “Beware of Communist Spies” were plastered across Taiwan’s public areas. It cut both ways: the China Times estimates that there are still more than 100 Taiwanese agents imprisoned on the mainland.

The most senior mainland spy held in Taiwan, and the one that Beijing wants back most, is Lo Hsien-chen, the Taipei Times believes. The 57 year-old double agent was formerly head of communications and electronic information at Taiwan’s army command headquarters, and he is believed to have been recruited by mainland Chinese agents thanks to a “honey trap” operation (in which a seductive woman was used to obtain compromising sexual video footage – so as to blackmail him into turning over secrets).

Nevertheless the history of seven decades of clandestine warfare hasn’t been erased by the release of three captured agents. Especially in Taiwan’s pro-independence camp – led by the Democratic Progressive Party (DPP) – where the mistrust of mainland-linked personnel – non-Chinese included – remains entrenched.

Bad news for Dan Mintz, the American producer behind Hollywood blockbusters like Iron Man 3. Mintz is the chief executive of DMG, a Los Angeles-based media firm that’s been grabbing headlines in Taipei thanks to a deal to buy a 61% stake in ETTV, a leading Taiwan television network, from private equity firm Carlyle for $600 million.

A hefty investment from an American firm in Taiwan would normally be welcome. However, a committee overseeing overseas acquisitions on the island has pointed out that DMG’s partner in China, DMG Entertainment & Media, is listed in Shenzhen and has been an active movie producer on the mainland.

According to Taiwan’s Apple Daily, which cited a statement from the island’s foreign investment regulator, co-founder of DMG Peter Xiao is said to have links with the People’s Liberation Army (PLA).

The deal is now hanging in the balance. The governing party, currently led by Ma Ying-jeou, says Taiwan must embrace much needed foreign investment. But the DPP is accusing Ma’s KMT of trying to force through the sale before Taiwan’s presidential election next month (when the DPP is expected to win comfortably).

Meanwhile, more mainland Chinese M&A looks to be in the pipeline elsewhere in the film industry, with the Financial Times reporting this week that Viacom may sell a stake in its Paramount studio to Alibaba. The Chinese internet giant is reportedly in talks to acquire Hong Kong’s South China Morning Post newspaper too.

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