Reconciling words at the end of the year sound different. The spokesman for China’s office for Taiwan affairs spoke of “red lines”, of “drastic measures” and the “resolute smashing” of a “separatist conspiracy”. Ma Xiaoguang only held a regular media conference last week, but his outlook for the New Year sounded feverishly urgent. The conflict between the mainland, Taiwan and „external forces“ – which was probably meant primarily by Taipei’s ally America – is likely to become „sharper and more intense,“ said Ma. He devoted a large part of his presentation to the economy, the most important pillar in cross-border relations on the Taiwan Strait. Ma pointed out that Beijing’s 14th Five-Year Plan offers many opportunities for Taiwanese businesspeople. And he expressed a hope that must seem like a threat to those addressed: namely, that „Taiwanese compatriots and Taiwanese companies are on the right side of history and will draw a clear line to the separatist forces of Taiwan’s independence“. In recent weeks, the government in Beijing has made it increasingly clear that it expects Taiwanese companies to show de facto loyalty. The case of the Far Eastern Group conglomerate made headlines, receiving a fine of over 88 million Renminbi in November, the equivalent of almost 13 million Swiss francs. Officially, it was about alleged misconduct by the textile subsidiary Far Eastern New Century and Asia Cement, for example in the areas of the environment and taxes. Fine is de facto political But China didn’t even try to keep up the disguise of a legal affair. Commenting on the case, the Taiwan Affairs Bureau said the government would „absolutely not allow people who support Taiwan’s independence (…) to make money on the mainland“. Taiwanese businessmen and companies must „take practical measures to maintain peaceful development of cross-strait relations“. The official Xinhua news agency even called in a comment from Taiwanese companies for a “greater contribution to the reunification of China”.

The chairman of the Far Eastern Group is considered to be well connected in China, and in Taiwan he is known as a supporter of the more Beijing-friendly opposition party KMT. The corporation’s undoing was evidently the fact that it had not only supported the KMT with party donations in recent years, but – as many companies in democracies do – also the ruling party, namely the pro-Taiwanese DPP. Among other things, the group donated one million Taiwanese dollars in 2018 to the then mayoral candidate and current head of government, whom China describes as a „die-hard activist for Taiwan’s independence“. The punishment against the Far Eastern Group shocked the domestic business community, according to the Taiwanese magazine „Commonwealth“. Many business people now asked themselves: If even KMT-related entrepreneurs are in danger, does that mean that Beijing will now take radical action? The magazine itself asked in the headline who would be punished next.

The mistrust is so great that many Taiwanese people on social networks wonder whether the sudden problems of two Taiwanese actors and business people on the mainland should not be understood in this context. Zhang Ting and her husband Lin Ruiyang founded Shanghai Dowell Trading cosmetics company in 1996. She is known for her TST Tin’Secret brand, which is promoted by popular Taiwanese and Chinese models and actors. Last week, the antitrust authorities in the northern Chinese city of Shijiazhuang announced that they were investigating the company for evidence of a suspected pyramid scheme. A pyramid system does not actually generate profits, but relies on constant new capital from new participants in order to pay out money to older participants. As a precaution, the agency confiscated company assets worth 600 million yuan, or over 86 million Swiss francs. China’s Taiwan Affairs Bureau said the case had nothing to do with relations with Taiwan.

For decades, the economy has decisively determined relations between Beijing and Taipei. For a long time Taiwan was more developed economically than China. From the 1990s onwards, Taiwanese companies increasingly outsourced their production to the cheaper mainland, particularly in the nearby province of Guangdong (Canton). First it was about textiles and toys, later about iPhones and computer chips. Taiwan expert Shelley Rigger writes in her book „The Tiger Leading the Dragon“ that Taiwan drove China’s economic rise. China’s gross domestic product per capita is still well below that of Taiwan, but the mainland has lagged behind the island economically, especially in the glossy metropolises on the coast. Many Taiwanese are therefore drawn to China to work. It is estimated to be more than a million, a significant loss for the island of just 23 million people. Taiwan’s relative GDP is more than twice that of China Gross domestic product per capita in 2020, in US dollars

The businessmen among them are known as „taishang“. The Communist Party sees them as influential intermediaries who can create a mood for unification with the mainland in Taiwan. China is trying to attract “taishang” with a series of tax breaks, subsidies and other measures. Many cities have specific programs and business parks for this. The chairman of the Far Eastern Group apparently knew what Beijing wanted from him after the fine against his group. In an article for the Taiwanese newspaper “United Daily News”, Xu Xudong wrote that he had always spoken out against Taiwan’s independence. The „progress“ and „rapid rise“ of the mainland could not be ignored. At the same time, Xu stressed that, like most Taiwanese, he wanted to maintain the status quo in Taiwanese-Chinese relations. In fact, the majority of the democratically governed island does not want any formal independence, but even less an association with the one-party dictatorship.

Xu’s contribution read in part like a pleading appeal to the Taiwanese. Because companies that invest in China sometimes not only have to come to terms with Beijing, they also have to pay attention to public opinion at home. And they don’t like it at all when a local company «licks the communists‘ boots», as it is called in Taiwan. As a result, for example, a Taiwanese activist group called Snowball leads a ranking of milk tea chains symbolzing the so called Milk Tea Alliance of Hongkong, Burmese, Japanese, Indian and other democracy activists who want to build a Pan-Asian anti-CPC- front in Asia: At the top are providers with practically no branches on the mainland, and at the bottom are supporters of Beijing’s Taiwan policy. In the current political climate in Taiwan, wrote Xu Xudong in his guest post, Taiwanese firms investing in the mainland should feel guilty.

In fact, there is no reason to feel guilty. After all, even American companies continued to invest heavily in Mainland China despite the trade conflict with China. However, this example actually only demonstrates that an entrepreneur who is more of the KMT and who has also donated to the DDP will be sanctioned by Beijing. The question is whether he and other entrepreneurs should distance themselves from the DDP and only finance the KMT and their status quo politics or whether DDP and KMT are being attacked equally, since a status quo politics due to the 1992 consensus on the part of Beijing is viewed as too passive and unacceptable and Xi Jinping now demands active loyalty in matters of reunification. In any case, the case is now well beyond business circles and also ensures polarization within the KMT and the military as the following article in the Taipeh Times makes clear:

Tue, Jan 04, 2022 page8

“DPP should embrace Yu Pei-chen

• By Teng Hon-yuan 鄧鴻源

Retired army general Yu Pei-chen (于北辰) on Friday announced on Facebook that he was leaving the Chinese Nationalist Party (KMT). POP Radio politics talk show host Chiu Ming-yu (邱明玉) said that she has heard that Yu might run as an independent candidate for city councilor in this year’s local elections.

Instead of running as an independent candidate for the Taoyuan City Council, Yu could be the Democratic Progressive Party’s (DPP) candidate for Taoyuan mayor. According to news reports, DPP internal polling shows that, despite having been born into a KMT-supporting military family, voters view Yu as level-headed and reasonable.

Yu has previously said that he decided to leave military social groups after some of his former comrades in the army said that if Taiwan were handed over to the Chinese People’s Liberation Army or the Chinese Communist Party, it would be governed better than it is under the DPP.

Yu said that this kind of thinking completely contravenes the oath of service to the nation that those in the military take when they join.

Yu caught the attention of online commentators and independent voters after he said that he is a member of the Republic of China “party” and supports any democratically elected government or president.

Yu, together with a number of enlightened current and former military officers, have radically improved the public’s impression of the military and established its position as an independent institution, rather than the KMT’s private army.

A great many members of the military are highly principled and share Yu’s views.

Like former general Sun Li-jen (孫立人), Yu shares the view that the military is a politically neutral institution that belongs to the nation. If the KMT is unable or unwilling to draw upon Yu’s leadership and experience, the DPP should grasp the opportunity with both hands.“

https://www.taipeitimes.com/News/editorials/archives/2022/01/04/2003770676

However, it seems that the CCP´s measures already led to a intensifying polarization within Taiwan, the KMT, the business community and the Taishang as Chinese secret service and the United Front will also try to make use of the 8 types of agents described in Sun Tse´s “Arts of War” in the hope that a KMT warlord or Beijing´s 5^th column will open the island´door gate as previous traitors or then patriotic, peace loving compatriots and warlords did before in China´s history. Or as the USA experienced in South Vietnam and Afghanistan that the native military it supported with billions of dollars and military technology just didn´t want to fight against the alleged enemy when it beame serious..