TAIPEI -- With next month's presidential election billed as a referendum on Taiwan's relationship with China, business leaders are reassessing their traditional loyalty to the mainland and the Beijing-friendly Kuomintang as trade war risks grow.
Taiwanese businesspeople operating in China, commonly known as taishang, will shortly begin returning home in droves. They number between 400,000 and 1 million, and about 200,000 are expected to return and vote for Han Kuo-yu, the main opposition Kuomintang candidate, according to a party insider.
"They are especially motivated this time around, and many taishang are unable to book airplane tickets" because of the rush of demand, the person said.
The Association of Taiwan Investment Enterprises on the Mainland, the largest group representing taishang, provides round-trip air tickets for returnees from China. The tickets can be obtained for less than 6,000 New Taiwan dollars ($199), or 20% to 30% below market rates, according to a report by Taiwanese newspaper United Daily News.
The association is close to both the Kuomintang and the Chinese government. Chairman Li Zhenghong is a member of Han's working group focused on cross-strait relations.
Liu Jieyi, director of China's Taiwan Affairs Office, serves as an honorary chairman of the association. The office said in 2016 that it will not allow taishang to use money earned on the mainland to support Taiwanese independence.
President Tsai Ing-wen, a China skeptic, maintains a healthy lead in the polls thanks to factors including the spillover from the Hong Kong protests. Her Democratic Progressive Party maintains that China is meddling in the electoral campaign, a charge that Beijing denies.
Taiwan's business community has traditionally supported the Kuomintang due to its friendly stance toward Beijing. Chang Yung-fa, the late founder of the shipping conglomerate Evergreen Group, tipped the 2008 race by throwing his lot behind eventual winner Ma Ying-jeou, of Kuomintang.
Terry Gou, then the chairman of Apple assembler Foxconn Technology Group, assumed the same kingmaker role by endorsing Ma for reelection.
But in this election season, the business community and the DPP have drawn closer to each other in a way that was once unheard of. As the trade war raged between the U.S. and China, Tsai's administration urged businesses to repatriate production to Taiwanese soil. Electronic device makers such as Quanta Computer and Pegatron answered the call.
Chen Mei-Ling, minister of Taiwan's National Development Council, told reporters Tuesday that NT$711.5 billion worth of investments have been repatriated this year.
Because of the growth in investment, Taiwanese officials upgraded the island's economic growth forecast for the year to 2.64%, following an upward revision in August. The rosy economic numbers have added wind to Tsai's electoral prospects.
China has at least one card left to play, however. The Economic Cooperation Framework Agreement between China and Taiwan expires next June, giving Beijing the option of not renewing the free trade deal.
The agreement eliminates tariffs on over 500 products, including machinery and petrochemicals. If duties were to rise, it would deal a huge blow to Taiwanese industry.
Darson Chiu, deputy director at the Taiwan Institute of Economic Research, believes Beijing will not approach such a decision lightly since it would invite the ire of Taiwanese businesses.
"While China is turning up the political pressure on the Tsai administration, the country is also rolling out economic incentives in an attempt to draw in companies and [Taiwanese] people," said Chiu.
At the same time, China risks giving the impression that the work to unify the mainland with Taiwan has stalled. "We can't predict what move China will make," said an executive at a Taiwanese machinery maker.