In January 2012 the Kuomintang’s Ma Ying-jeou won a second presidential term in Taiwan. Investors seemed happy to see closer economic ties across the Taiwan Strait too. Just a month before the KMT’s victory, Want Want China and Tingyi, two of the largest Taiwanese-owned food providers in mainland China, were added to Hong Kong’s benchmark Hang Seng Index.
The mood among the Blue coalition – political parties in favour of a unified China – has since turned darker. The KMT’s policy on closer ties with the mainland has proven a turn-off for many younger Taiwanese. For instance, hundreds of students stormed Ma’s government headquarters in 2014 to protest against a trade pact. And the more independence-minded camp eventually won the general election in January this year with a landslide victory (see WiC310).
In a similar reversal of fortune, Tingyi lost its blue-chip status in August, just three months after Tsai Ing-wen of the Democratic Progressive Party took the presidency from Ma. That came in the wake of a remarkable decline in the price of the instant noodle maker’s Hong Kong-listed shares. Tingyi’s market value was about HK$150 billion ($19.2 billion) when Ma won his second term. However, as of this week, its market capitalisation hovered just above HK$50 billion. “Up to HK$100 billion of market value in Tingyi has vaporised,” Taiwan’s Wealth magazine lamented this month.
Want Want China seems to have suffered the same fate. Its Hong Kong-listed shares were worth as much as HK$160 billion two years ago, but its market capitalisation has dropped to about HK$62 billion. (The food conglomerate’s controlling shareholder Tsai Eng-meng has seen his net worth fall to $6 billion from $8.9 billion a year earlier, Forbes calculated).
According to Jiemian, a mainland Chinese news portal, Want Want’s most important product line is children’s snacks such as rice crackers. This business has suffered due to a drop in birth rates (before the One-Child Policy was repealed this year). But both Jiemian and Wealth have also spotted a common problem for the beleaguered Taiwanese duo: competition from mainland Chinese companies. “In the past Taiwanese-owned firms Tingyi, Want Want and Uni-President [whose Chinese name means ‘unification’] dominated the mainland consumer food market. But now domestic firms including Bright Food, Yiki, Mengniu and COFCO have all grown much stronger. The challenge for Taiwanese firms is much bigger,” Wealth magazine suggested.
Some think that Beijing has deliberately made life more difficult for Taiwanese companies in the mainland. What is clearer is Beijing’s influence on the island’s tourism industry since the DPP took power and relations began to cool across the Taiwan Strait. The numbers from Taiwan’s Mainland Affairs Council back-up the picture of a broader slump, showing 15% fewer visitors from mainland China in July alone.
Chinese newspapers have also suggested that numbers have fallen because visitors don’t feel welcome in Taiwan. In June, a video clip went viral in which a local woman insults an old man as “a shameless China refugee” and demands that he “scram back to the mainland”.
Last week, about 10,000 Taiwanese tourism workers took to the streets, calling on the government to improve the situation. They claim that the mainland authorities have cut approvals for tourist groups, punishing Tsai, who has yet to acknowledge the so-called “1992 Consensus”, a tacit understanding on both sides of the Taiwan Strait that there is only “one China”.
A Taiwanese delegation of local governments visited Beijing last week in an attempt to “reset and restart” cross-strait ties. But the message was clear: tourism to the eight cities in the delegation would rise but only if each of the eight mayors publicly supports the 1992 Consensus. The tactic has gone down badly with the DPP camp. “Beijing runs the risk of tacitly admitting that Chinese tourists are a tool of united front political warfare,” the Taipei Times warned.
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