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Terry Gou's China ties complicate his Taiwan presidential run

Foxconn's mainland footprint stokes conflict-of-interest concerns

TAIPEI -- Terry Gou's entry into the Taiwanese presidential race has raised questions as to whether the Foxconn founder and chairman, known to have close ties to Chinese President Xi Jinping, can truly serve Taiwan's best interests when he built his business empire on the mainland.

Gou announced his decision to seek the nomination of the China-friendly Kuomintang at a ceremony Wednesday to honor his financial contributions to the party. He said that he had visited a shrine to the sea goddess Mazu in a Taipei suburb where he had spent his childhood and that she had appeared to him in a dream, telling him to run and bring peace and prosperity to Taiwan.

The Kuomintang is expected to choose a candidate in July. The primary had been expected to be a hard-fought affair including former New Taipei City Mayor Eric Chu Li-luan and Kaohsiung Mayor Han Kuo-yu, who has drawn comparisons to U.S. President Donald Trump for his fiery rhetoric.

As the Taiwanese economy has cooled, growing income inequality and low wages among the young have become major political issues. Kuomintang candidates in particular need to show that they can promote cross-strait economic exchanges.

This is where Gou's strength lies. Foxconn, formally Hon Hai Precision Industry, set up shop on the mainland back in the 1980s -- well before counterparts in Japan, the U.S. or Europe -- and expanded by joining hands with local governments eager for economic development.

In a clear demonstration of Gou's deep business and political ties in China, he is said to have met Xi when the future Chinese leader was still a relative unknown in Fujian Province. Xi addressed Gou as "old friend" at a 2013 meeting on the southern Chinese island of Hainan.

But while Taiwan's public wants to reap economic benefits from the mainland, many still oppose reunification with China. The president here has had to walk a fine line between China and the U.S., particularly given the American role in Taiwanese security.

Gou appears to have a knack for navigating Washington as well. He made a surprise trip to the White House in July 2017, half a year after President Donald Trump's inauguration. There, he announced a $10 billion investment to build an LCD production facility in the U.S., in a swift response to Trump's "America first" policy.

Still, most of Foxconn's assets and production facilities are in China. As president, if there is ever a conflict of interest between Taiwan and Foxconn, Gou's actions will be called into question, said Arthur Wang of the Cross-Strait Policy Association here.

Doubt has also been cast on Gou's stance regarding security. Taiwan "should not depend on the U.S. for national security" and should invest in American artificial intelligence instead of buying its weapons, Gou told reporters Monday.

U.S. involvement is crucial to Taiwan's security, given that China's military power dwarfs Taiwan's. American weapons have been a key factor in curbing this imbalance. Meanwhile, China vehemently opposes U.S. arms sales to Taiwan.

Gou says Taiwan should maintain peace with China while protecting its uniqueness. But there is a fundamental rift between Taiwan's pro-independence leanings and Beijing's reunification push.

The Foxconn chief lacks an understanding of security issues, Wang said.

"Gou's China-friendly stance will hurt him in the election," a member of the Democratic Progressive Party said.

Meanwhile, the DPP is grappling with its own complications in backing a candidate. While President Tsai Ing-wen plans to seek reelection and is the party establishment's pick, pro-independence former Premier William Lai Ching-te abruptly announced in March that he would run against her.

Lai stepped down as premier months ago to take responsibility for the DPP's trouncing in local elections, and he had reached an accord with the party mainstream to let Tsai run unopposed. The DPP, which had been set to choose its candidate Wednesday, is now expected to decide in late May.

And with independent Taipei Mayor Ko Wen-je -- who has won the support of voters tired of the two major parties -- considering throwing his hat into the ring as well, it is hard to tell how the election will turn out.

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