TDB Vol. 1 No. 10: Taiwan Confirms China’s ‘Black Hand’ Behind Anti-Reform Protests

TDB Vol. 1 No. 10: Taiwan Confirms China’s ‘Black Hand’ Behind Anti-Reform Protests

Using ‘content farms’ and other means, Chinese elements are suspected of generating much of the disinformation that has been circulating concerning the Tsai administrations’ pension reform plans. They have also helped mobilize protesters. J. Michael Cole looks into this worrying interference in Taiwan’s democracy. 

 

Taiwan’s national security apparatus on Monday confirmed that a recent wave of increasingly virulent protests against President Tsai Ing-wen’s pension reform efforts have been influenced by China.

According to government information, Chinese elements (presumably agencies involved in political warfare) have played a role in mobilizing protesters and spreading disinformation about pension reform via electronic media. Various web sites, as well as the LINE instant communication tool, have been used to disseminate “fake news” about the government’s plans. The national security apparatus has confirmed that the information originated in China.

Besides domestic online platforms, China has also been using microblogging sites in China, as well as WeChat and popular “content farms” (also known as “content mills”) such as COCO01.net to spread disinformation and interfere with government policy back in Taiwan.

Content farms are platforms that pay large numbers of freelance writers to generate large amounts of content that is specifically designed to satisfy algorithms for maximal retrieval by automated search engines. While such platforms were initially designed to generate advertising revenue, groups and regimes have quickly realized the potential of content farms to manipulate public perceptions. Using techniques that have been tried and tested by authoritarian regimes in Russia and China, “repeater stations” — online and traditional media that willingly take part in “fake news” efforts or that fail to properly corroborate information — are then relied upon to broadcast the disinformation to a wider audience.

On several occasions, anti-independence slogans were chanted at the protests against pension reform, which also suggests that the movement has been co-opted by the Chinese side.

▶︎ See also “TDB Vol. 1 No. 9: Pension Reform: A Bitter but Necessary Pill”

Over the past six months, members of Chang An-le’s (“White Wolf”) China Unification Promotion Party (CUPP) have also been identified at various protest sites. Chang, who in an interview with foreign media in 2014 confirmed that he works closely with the State Council’s Taiwan Affairs Office (TAO), led members of his organization at an anti-pension reform protest outside the Legislative Yuan in April. Since 2013, the CUPP has also been involved in activities targeting independence activists and members of civil society in Taiwan and Hong Kong. Chang is also a former head of the Bamboo Union, a major crime syndicate in Taiwan with roots in China.

Physical violence is also a m.o. of those organizations, and the protests against pension reform have often led to violent clashes, resulting in injuries. Other organizations with a history of violence, such as the Blue Sky Alliance, have also participated in the protests.

Worryingly, protest organizers appear to have insiders in Tsai’s security apparatus — retired members of the police and national security apparatus ostensibly still have good contacts within the active force — and on several occasions have been able to obtain details about her daily schedule and itinerary. The groups have threatened to shadow President Tsai and Vice President C. J. Chen and thus could compromise the leadership’s personal security. Last week organizers also threatened to disrupt the upcoming Universiade in Taipei.

Taiwanese authorities have been closely monitoring the developments and have implemented measures to counter the disinformation.

 

Top photo: Members of the China Unification Promotion Party protest outside DPP headquarters in 2015 (J. Michael Cole).

TDB Vol. 1 No. 9: Pension Reform: A Bitter but Necessary Pill

TDB Vol. 1 No. 9: Pension Reform: A Bitter but Necessary Pill

When President Tsai Ing-wen (蔡英文) delivered her inauguration speech after being sworn in as Taiwan’s first female president on May 20 last year, she pledged to build a better nation for younger generations. The first and foremost task in fulfilling that goal, she said, is to reform the nation’s cash-trapped pension system that would otherwise go bankrupt within a decade. Stacy Hsu looks into the history of and the many challenges associated with this endeavor.

 

Before the Democratic Progressive Party (DPP)-dominated legislature passed the pension reform bills targeting retired civil servants and public-school teachers amid fierce protests in late June, the country’s pension system was a “political time-bomb” that many leaders before Tsai had tried — and failed — to defuse.

At the center of the problem are two notorious absurdities in the pension schemes of retired military personnel, civil servants and public-school teachers: the so-called 18% preferential interest rate and abnormally high income replacement ratios.

The preferential interest rate can be dated back to as early as 1960, when Taiwan was under authoritarian one-party rule. In light of inflation and the relatively low salary received by public servants back in the day, the Chinese Nationalist Party (KMT) regime issued a series of administrative orders to offer a preferential saving rate on civil servants’ pension payments in a bid to ensure their financial security after retirement.

According to the Examination Yuan, the administrative body in charge of managing public servants, the saving rate has undergone several adjustments since its introduction, from the initial 21.6% to 14.25% in 1970, 16.7% in 1979 (with the rate floor at 14.25%), and then to 18% (also the rate floor) in 1983.

The preferential interest rate was scrapped following the implementation of a new pension system in 1995, which increased civil servants’ pension benefits by allocating part of their monthly income to the pension fund, rather than relying on the government as the sole contributor.

However, it did not quash the controversy surrounding it, as public servants who were hired before 1995 were still entitled to the saving rate after retirement. (The amount of a retiree’s pension payment that is eligible for the interest rate depends on a public servant’s pre-retirement income and number of years of service prior to 1995.)

The meeting minutes of the Presidential Office’s Pension Reform Committee show that as of June last year, approximately NT$462 billion (US$15 billion) in pension payments from about 457,000 public-sector retirees were stored in bank accounts eligible for the 18% interest rating, putting a NT$82 billion dent in government coffers each year.

The committee’s deputy convener, Lin Wan-i (林萬億), estimated that the interest rate would not really become history until 2054.

Though the saving rate had its historical necessity, today it is mostly seen as a remnant of Taiwan’s authoritarian era, one of the roots of social injustice, and a form of political payout by the previous KMT authoritarian regime to cement support among the nation’s civil servants, which has in turn created an uneven playing field for political parties.

Due to the preferential interest rate and/or public-sector employees’ ostensibly “unfair” pension calculation formula, some of their actual income replacement ratios (the percentage of one’s pre-retirement income) could be over 100%. This means they could earn even more in retirement than they did when they were on the workforce.

In 2006, despite leading a minority government, president Chen Shui-bian (陳水扁) of the DPP sought to reform the preferential interest rate. However, instead of gradually phasing out the rate, he only managed to cut down on the amount of pension payment from which a retiree could earn the interest rate by putting a cap on their income replacement ratio.

Chen’s successor, Ma Ying-jeou (馬英九) of the KMT, also made pension reform one of his policy priorities, describing the problem as so dire “people will regret it tomorrow if we do not reform it today.”

The Ma administration established a pension reform task force to solicit public opinions in 2009 before rolling out a draft plan in 2013. Despite the efforts, the plan was stalled at the KMT-dominated legislature at the time — allegedly due to electoral concerns and overwhelming criticism of what president Ma called a “painful decision” to cut year-end bonuses for public-sector retirees in 2012.

Failed efforts by her predecessors and fears of further alienating the DPP among public servants should have deterred President Tsai from making another attempt. Instead, she put pension reform at the forefront of her policies and joined hands with DPP lawmakers in ramming pension reform bills that many deem drastic through the legislature.

Under the bills passed so far, the 18% preferential interest rate will be reduced to zero two years after the bills’ promulgation scheduled for July 2018.

In addition, civil servants and public-school teachers (the draft bill for military personnel is yet to be drawn up) will see their income replacement ratio reduced to 60% within 10 years and ultimately be required to calculate their pension payment based on their average monthly salary in the final 15 years of employment, rather than their last month of service as currently stipulated.

Tsai’s reform success has reflected in her approval ratings. According to a survey by the TVBS poll center on July 12, the president’s support rate has climbed to 29%, from 21% in June.

Such efforts, however, are not without their costs. President Tsai has been shadowed by anti-reform protesters, some of whom have threatened to use violence or to disrupt events such as state visits by foreign presidents or the upcoming 2017 Universiade in Taipei. The KMT and its spin-off, the People First Party, are mulling filing a request for a constitutional interpretation on pension reform legislation.

Just as in other countries, pension reform is almost always a magnet of unpopularity and fierce protests. A good leader will know when to overlook temporary noises and focus on the long-term good.

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