The ruling party Kuomintang’s (KMT) dramatic loss during Taiwan’s municipal elections –including the mayoral race in the capital Taipei —  on Nov. 29 worried Taiwanese businessmen who are working in China or dealing business with Chinese counterparts now that the rival party Democratic Progressive Party (DPP) remains relatively conservative when it comes to cross-strait relations.

During the elections for the nation’s mayors, city councilors, wardens, the KMT lost most of the important seats, including Keelung mayor, Taipei mayor, Taoyuan mayor, and Taichung mayor while New Taipei City Mayor Eric Chu (朱立倫) is the only KMT candidate who won his re-election.

While city mayors do not deal with cross-strait policy, the weekend’s political upheaval shows that voters will likely give the China-friendly KMT a cold shoulder during the next national election.

“More than more people began to hate businessmen who are involved in cross-strait business activities ever since the political tug of war between President Ma Ying-jeou (馬英九) and Legislative Speaker Wang Jin-pyng (王金平) last year,” said Yeh Hui-teh (葉惠德), chairman for Shanghai Taiwanese Businessmen Association. “People’s hatred against businessmen continued to increase, as the Sunflower Movement and the food crisis took place in the past few months.”

Yeh said that KMT’s incompetent performances gave DPP to come back during this elections, which will create more obstacles in terms of cross-strait business. Kuo Shan-hui (郭山輝), chairman of the Taiwanese business association, an association of Taiwanese businessmen in China, however, said that the Chinese authorities will have different logic for this and begin to communicate with the DPP differently.

“Nothing will be easy for the future, if China and the DPP do not have any mutual trust,” Kuo said.

What kind of change?

General Chamber of Commerce chairman Lai Cheng-i (賴正鎰) described the result of the elections as “people’s anger toward the government’s failing to re-initiate the economy while most people’s paychecks are not increasing but the inflation continues.”

Lai said that most businessmen do not care whether the KMT or the DPP wins but they do care whether the winner knows how to commission the right officials and do the right things.

“We are worried that a party and its members would continue to oppose certain policies for no reasons once the party becomes an opposite party from a ruling one,” Lai said.

Bank of America Merrill Lynch’s Asia research viewed the KMT’s loss is likely to trigger slower equity inflow into Taiwan in the near term, which will be bad for equity.

Alan Romberg, director for the Stimson Center’s East Asia Program, did not believe that Beijing’s attitude toward Taipei will change because of the elections. He said that peace and continuous development on the cross-strait relations will remain the priority for Beijing for now, while the Chinese government will continue to figure out new resolutions to communicate with the DPP in the future. But, a party-to-party communication between China and the DPP will not happen as long as the DPP does not accept the “one China” strategy, Romberg said.

Bonnie Glaser, a senior adviser for Asia in the Freeman Chair in China Studies of the Center for Strategic and International Studies, said that the U.S. government may encourage DPP Chairwoman Tsai Ing-wen (蔡英文) to find out more solutions to make friends with China when she visits the United States next February because a regular and steady cross-strait relation will be the best priority for the U.S. government.

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Ping an Insurance raises US$4.7 billion from investors

Ping An Insurance (SHA: 601318) raised a total of US$4.7 billion on Nov. 30 through a private placement of new shares with investors, including Alibaba’s (NYSE: BABA) Jack Ma (馬雲) and Tencent’s (HKG: 700) Pony Ma (馬化騰).

Privately owned Ping An, which also controls the separately listed Ping An Bank (SHE: 000001) has been among China’s most aggressive groups in pursuing internet finance ventures. Its affiliates include Lufax.com, the peer-to-peer lending platform, and online payment company 1qianbao.com.

KMT Chairman Ma Ying-jeou steps down for the election defeat

Taiwan’s President Ma Ying-jeou (馬英九) offered his resignation as the chairman for the ruling party Kuomintang (KMT) on Tuesday afternoon (Dec. 2) as a gesture of taking responsibilities for KMT’s being trounced during last Saturday’s elections.

During the elections for mayors, city councilors, wardens, etc., the KMT lost major seats, including Taipei mayor, Taoyuan mayor, Keelung mayor and Taichung mayor. KMT Secretary-General Tseng Yung-chuan (曾永權) immediately resigned, followed by Taipei Mayor Hau Lung-bin (郝龍斌) and Vice President Wu Den-yih (吳敦義) as vice chairmen on Dec. 1.

In addition to Hau and Wu, the KMT still has five vice chairmen and women, including Tseng, Hung Hsiu-chu (洪秀柱), Chiayi Mayor Huang Min-hui (黃敏惠), New Taipei City Mayor Eric Chu (朱立倫) and Taichung Mayor Jason Hu (胡志強).

By KMT’s regulations, the chairman will be the president when the party is ruling. After Ma quit, an extraordinary meeting must be organized for amending the regulations for electing a new chairman within three months, while one of the vice chairmen will be the acting chairman for the party.

Hung is the priority candidate to take the job at this moment, now that Tseng has declined such allegation.

Taiwan’s PMI shows first contraction during the past two years

The Chunghua Institution for Economic Research (CIER) said on Dec. 1 that PMI declined to 49.2 in November from 51.5 in October, as manufacturers saw a slowdown in business amid a lackluster global economy.

CIER President Wu Chung-shu (吳中書) said that it was the firs contraction since December 2012, with almost all subindices falling below the neutral threshold as inventory-building demand linked to Apple’s new handsets softened.

“The latest PMI value suggests a slowdown in the domestic economy, instead of a downturn due to a lack of seasonal adjustment,” he said.

China tax office plans to monitor foreign firms’ profits

China Economic Review reported on Dec. 2 that the Chinese authorities are planning to put a system in place to monitor the profits of foreign companies to end alleged tax evasion.

An anonymous source said that Microsoft was required to pay more than US$150 million in China last month, while an unnamed foreign company had paid US$137 million in back taxes and interest as well as more than RMB100 million in annual disbursements on Nov. 23.

The report also said that the Chinese authorities will also tighten management of tax practices by Chinese companies abroad.

The post Cross-strait News Daily Round-up for Dec. 2 appeared first on VR World.