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The cynical view out of Taiwan is that since billionaire Terry Gou had only a small chance of winning, he was not ready to take big risks, unlike Donald Trump, who fought through the 2016 U.S. election cycle as the underdog. (Nikkei Montage/ Kosaku Mimura/Reuters)
China up close

Foxconn's Terry Gou drops bid to be Taiwanese Donald Trump

Tycoon evades being branded 'criminal of history' with surprise withdrawal

KATSUJI NAKAZAWA, Nikkei senior staff writer | China

TOKYO -- The curtain fell suddenly on Taiwan's political drama starring billionaire business tycoon Terry Gou, whose stab at the presidency gripped the island and kept mainland China on its toes for several months.

The unexpected ending of the saga has made it clear that Gou, the founder and former chairman of Hon Hai Precision Industry, also known as Foxconn Technology Group, is no Donald Trump.

Gou issued a statement late Monday night announcing his decision to give up his plan to run in Taiwan's presidential election, scheduled for January.

Only four days earlier, Gou had defected from the main opposition Chinese Nationalist Party, also known as the Kuomintang, or KMT, accusing it of being "corrupt."

Gou's withdrawal surprised many. It came a day before the deadline for notifying the Central Election Commission of plans to collect the signatures required to run as an independent.

Explaining his decision, Gou said in the statement that he had thrown his hat into the ring because of his aspirations to shore up Taiwan's economy but contrary to his wishes, "hatred" and "confrontation" had been instigated.

Gou seems to have mixed feelings. Earlier in the summer, after being trounced by Kaohsiung Mayor Han Kuo-yu in the Nationalist Party's presidential primary, the business magnate maintained his electoral resolve, a person with a long-standing relationship with Gou said.

Just days after that primary loss, on July 15, Gou appeared in an unexpected place: Kyoto.

Kifune Shrine near Japan's ancient capital of Kyoto is known in Taiwan as a "power spot."   © Kyodo

Gou visited Kifune Shrine, which is known in Taiwan as a "power spot," a spiritual or sacred place, that lies in the hinterland of the ancient Japanese capital.

When he returned from his pilgrimage, Gou most likely felt refreshed, both mentally and physically, having recovered from the emotional wound inflicted by his crushing primary defeat.

Gou immediately began to talk about various policies -- a sign that he was still willing to stand in the election.

According to Gou's longtime acquaintance, the tycoon's pilgrimage to Kifune Shrine had one more hidden meaning: a well-known Chinese historical event called Dongshan zaiqi, East Mountain comeback.

The ancient event involved Xie An, a talented general who secluded himself on Dongshan, East Mountain, in what is now Shaoxing, Zhejiang province. Xie made a comeback after the age of 40 and then defeated a 1 million-strong enemy force.

Xie led the troops of the Eastern Jin dynasty, which were said to be on the back foot, to a resounding victory over the enemy troops of the Former Qin in the 383 Battle of Fei River.

In the eyes of Taiwanese, a mountain near Kifune Shrine is also an "eastern mountain."

Gou's presidential bid had been of great interest to China. Beijing regards Taiwan as a renegade province that must be reunified with the mainland, by force if necessary. And the candidate of the pro-independence ruling Democratic Progressive Party, or DPP, which distances itself from China, is incumbent President Tsai Ing-wen.

If the presidential race becomes a head-to-head contest between Tsai and KMT's Han, the China-friendly party may have a chance of winning. But Gou joining the race would split the conservative vote.

For China, which wants to prevent Taiwan from leaning further toward independence, a Gou run on the KMT ticket would have been a favorable development.

A Foxconn factory in Wuhan, Hubei province: One source suggests, "There is a possibility that there was some interference [by China] in Gou's surprise decision to drop his presidential bid as he has many [assembly] plant assets in the mainland."   © Reuters

But there was an unexpected turn of events.

Kaohsiung Mayor Han, a new political star quite different from other KMT politicians, gained a dominant position within the party. Not even Taiwan's richest man could compete against him.

If Gou had run as an independent, as a KMT defector, it would have doomed the China-friendly party's chances. This would have been extremely inconvenient for a China that already has its hands full trying to contain protests in the "one country, two systems" territory of Hong Kong.

At the beginning of this year, Chinese President Xi Jinping proposed again the unification of China and Taiwan under the same "one country, two systems" formula, which was originally devised with Taiwan in mind.

Now Hong Kong, experiencing its fourth month of street demonstrations, is making Taiwan wonder whether "one country, two systems" would mean the curtailment of its freedoms.

According to an opinion poll released recently by a pro-DPP think tank, Tsai's support rate is 10 percentage points higher than Han's.

The KMT's new rock star candidate, Kaohsiung Mayor Han Kuo-yu, no longer has to protect his conservative flank in Taiwan's presidential election. (Photo by EPA/Jiji)

Although Gou made his bombshell announcement late at night, Chinese media outlets quickly ran with the news, reflecting China's strong interest in Taiwan's presidential race.

The fast coverage also showed that local Chinese authorities had determined Gou's move was favorable to China. If the news had been deemed inconvenient, Chinese media outlets would have treated it under the careful supervision of local authorities.

Also on Monday, the Solomon Islands, a tiny country in the South Pacific, severed diplomatic ties with Taiwan in favor of China. As a result, the number of countries that have diplomatic ties with Taiwan declined to 16.

The move by the Pacific island country came shortly after the U.S. administration of President Donald Trump decided to sell F-16 fighters to Taiwan, drawing an angry reaction from China.

China, with an eye on the Taiwanese presidential election, has ratcheted up pressure on the Tsai administration. It has banned individuals from traveling to Taiwan on their own and called on its movie industry to boycott the Taipei Golden Horse Film Festival, known as the Chinese-language Oscars, to be held on the island in November.

Gou said in his statement that he had "decided" to give up his run after giving the matter "comprehensive" consideration. There is already speculation about what might have went into that consideration.

Said one source, "There is a possibility that there was some interference [by China] in Gou's surprise decision to drop his presidential bid as he has many [assembly] plant assets in the mainland, although we have to wait for verification."

Gou, whose business empire counts many massive plants in China, has built a relationship of trust with the Chinese government.

Gou has made so many trips to Beijing that he makes himself at home in the Chinese capital, where he and his subordinates can often be seen talking and strolling along the major east-west thoroughfare of Chang'an Avenue.

The Global Times, a newspaper affiliated with the People's Daily, the mouthpiece of the Chinese Communist Party, reported Gou's pullout from the Taiwanese presidential race in its online edition early Tuesday morning.

The report quoted a researcher on Taiwanese politics at Xiamen University in China's Fujian Province as saying that if Gou had played into Tsai's hands by splitting the conservative vote, he would have become "a criminal of history."

Taiwanese President Tsai Ing-wen had been looking forward to running for reelection against an opposition that appeared to be dividing and conquering itself.   © Reuters

The researcher also said Gou's decision "has protected the solidarity within the Chinese Nationalist Party, at least temporarily."

That said, Gou's decision has disappointed some of his supporters.

Said one: "Whether it's good or bad, Gou is nothing more than a figure in the business world. He is unfit for the political world. He is also not the same type of person as Trump, who shows a reckless valor, although both hail from the business world."

This supporter has a cynical view: Since Gou had only a small chance of winning, he was not ready to fight the election while risking so much.

Throughout the 2016 U.S. presidential election cycle, Trump was seen by many forecasters as an underdog. But nobody knows what will happen in a democratic election, which is what democratic politics is all about.

Gou could still enter the race, on the ticket of the small People First party. There are also rumors about several people throwing their hats into the ring before the final registration deadline in November.

But in the end, the race will come down to Tsai vs. Han.

The election takes place on Jan. 11. Until then, China's attitude toward Hong Kong will significantly affect which way Taiwanese voters decide to go.

As far as comprehensive considerations go, Taiwan's presidential election could end up playing a big role if Beijing finds itself deciding whether to mobilize troops from the People's Liberation Army or the People's Armed Police to quell the Hong Kong unrest.

Katsuji Nakazawa is a Tokyo-based senior staff writer and editorial writer at Nikkei. He has spent seven years in China as a correspondent and later as China bureau chief. He is the 2014 recipient of the Vaughn-Ueda International Journalist prize for international reporting.

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