Cross Strait

Man in the middle

Terry Gou visits the White House ahead of Taiwan’s election


Only I can fix this: Gou is friends with both Xi Jinping and Donald Trump

When it comes to the tricky task of working out how to conduct oneself in public, it seems that little has changed since the time of the Crusades almost a thousand years ago, when Christian nations sent armies to recover the Holy Land.

This was the point in history when it became customary to place a lady between two knights at the dining table in the hope that the woman would inspire the men to adopt some manners.

The manners of Taiwanese presidential hopeful Terry Gou were called into question this month too after he let slip an unchivalrous remark (he offended the island’s women with his comment that “the harem” should stay out of politics – indicating an anti-feminist attitude). That said, he evidently sees himself playing a similar role to a medieval damsel at a banqueting table, injecting more decorum into the dialogue between the US and China by putting himself in the middle.

His goal: to use his strong personal relations with the heads of both superpowers and thus dial down their hostile table talk about Taiwan, creating a political and economic ‘win-win situation’ for them all.

Gou has just returned from a trip to the US where he became the first potential Taiwanese presidential candidate to visit the Oval Office since 1979. White House press secretary, Sarah Saunders, said that Gou had met Trump because “he’s a great friend,” but emphasised that they did not discuss his candidature.

“Good friend” is also how Chinese leader Xi Jinping described Gou after the two met in Hainan in 2013. Gou has had a close relationship with Xi since the latter was governor of Fujian province in the late 1990s.

Gou believes that he can leverage these ties to the benefit of all. Like Trump, Gou is a businessman who loves to cut deals. However back at home he has ruled out the possibility of meeting Xi before Taiwan’s presidential election next year. “But if I was elected president I would immediately seek any opportunity for [cross-Strait] talks,” Gou told reporters in a press conference on Monday.

His other key messages about Cross Straits peace and economic prosperity have been overshadowed by his recent remark that “Taiwan is an inseparable part of China”. Gou the aspiring politician has found that the etiquette of how he refers to the island of his birth remains as much of a minefield as ever.

The pro-independence Democratic Progressive Party (DPP) accused him of undermining Taiwan’s current status. They worry that his friendship with Xi and his huge business empire on the mainland make him a secret supporter of unification.

If he is adopted this July as the presidential candidate by the more mainland China-friendly Kuomintang (KMT), it will also likely put him head-to-head with the DPP’s current leader and Taiwan’s incumbent president, Tsai Ing-wen.

Gou has been quick to assure reporters that his ‘inseparable’ remark was misrepresented. At the press conference this Monday, he said that he was clearly referring to the Chinese as one people rather than a single polity.

It is a view which commands some sympathy in Taiwan. One local social media commentator points out that even the DPP has never changed the wording of the constitution to the ‘Republic of Taiwan’ from the ‘Republic of China’ (the entity which ruled the Chinese mainland until the KMT was defeated in the civil war in 1949. The island is now classified by Beijing as a ‘renegade province’).

“What Gou is saying is technically true,” the commentator remarks. “He’s simply repeating the mantra that there’s one China, but it’s one where the ROC is separate from the PRC [People’s Republic of China].”

Gou himself spent most of his US trip trying to burnish his nationalist credentials by sporting a baseball cap with both the US and ‘Republic of China’ flags on it (he later complained to Taiwanese reporters that China’s state broadcaster CCTV had blurred his hat out digitally when reporting on his trip to the US).

He was even photographed wearing it while saluting Abraham Lincoln’s memorial in Washington DC. In a subsequent Facebook posting, he said that he had felt inspired by the fact that Lincoln was a great politician who never treated anyone as the enemy. Lincoln, he said, laid strong foundations for America’s future even though he had presided over a land that was even more divided than Taiwan is today.

Gou came back with two chief messages. Firstly, he wants China to recognise the Republic of China as Taiwan’s official title and give it some political “living space” on the world stage, allowing it to join global institutions such as the World Health Organisation. If it does not, he fears there will never be harmony between the two.

And secondly, he believes that once China and the US settle their trade differences (within a few months, he guesses) they will all prosper, even if the war for technological supremacy between them continues.

He also argues that Cross Straits peace should facilitate the partial transfer of the high-tech supply chain back to Taiwan from China. He wants to create, “a three-win situation during which Taiwan can make a profit, the US is able to attain its goal [ending its reliance on a mainland Chinese supply chain] and China is able to upgrade and transform its structure.”

What do Chinese netizens make of Gou’s view that he can talk to Beijing on an “equal” footing? A quick glance at the comments to the news coverage suggests that this may not be the case, or at least that the mainland’s censors do not concur.

In fact belligerence has been growing in the general public’s attitude towards the Taiwan question.

“Without US support, Taiwan doesn’t even have a fart,” says one netizen from Guangxi in one of the most liked comments below a Sina Finance article. Another from Heilongjiang adds, “There’ll be no war as long as US imperialists stay away from the Taiwan Straits.”

Over in the US, Gou’s visit coincided with the publication of an annual Pentagon report on China’s military power. Taiwanese journalists asked Randall Schriver, assistant secretary of defence for Indo-Pacific Security Affairs, how the US would respond if China invaded the island.

“I think our history is clear,” he replied. “When Taiwan has been threatened, the US has responded in an appropriate manner. I think it could be well expected that we would want to see Taiwan be able to preserve its status, free from coercion.”

As for Trump, it is only ever really about the business angle. “Great news on Wisconsin after my conversation with Terry Gou,” he tweeted. For after visiting the White House, Gou’s next stop was the midwestern state of Wisconsin where two years ago Foxconn promised to invest $10 billion in a state-of-the-art LED facility, creating 13,000 jobs.

Trump himself broke ground on the project, which he grandiosely described as “the eighth wonder of the world”. So far, Foxconn has spent just $99 million on the factory. As we wrote in WiC378, this will make it ineligible for the $3 billion of subsidies which the state government controversially promised it. Foxconn says building work has been delayed by bad weather. Trump remains keen for it to proceed ahead of his likely 2020 election campaign.

The current state governor, Tony Evers, also says he feels reassured after discussing the situation with Gou on his recent visit. The Democrat governor denies “never not supporting it” despite calling it a “horrible deal” for the state as well as “lousy” during his 2018 election campaign.

Some US newspapers, however, are deeply sceptical that it will go ahead as planned. As the Milwaukee Journal Sentinel writes, “No company ever attempted to build flat screens outside of Asia, much less in a part of America better known for engine casings and Johnson Wax.”

Yet Gou appears to see another benefit from the Wisconsin plant: to show that Foxconn is not entirely dependent on China and therefore less vulnerable to political pressure should he be elected Taiwan’s president. He has previously said that the “market is my country” and he would move production wherever costs are cheapest.

Indeed it seems that the particular part of the tech supply chain over which Foxconn has the most control won’t be located in the US or Taiwan, even as production is diversified away from mainland China for the first time. In mid-April, Gou confirmed that Foxconn would begin mass production of iPhones for its biggest customer, Apple, later this year in… India.

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.