Premier-designate Lin Chuan
The Most Inside Outsider
How did Lin Chuan, the son of mainlanders who grew up in military dependents’ villages, gain President-elect Tsai Ing-wen’s trust? In a new era marked by de facto majority rule and full accountability for the DPP, what challenges await him?
The Most Inside OutsiderBy Yishan Chen
From CommonWealth Magazine (vol. 594 )
ROC Premier-designate Lin Chuan, who turns 65 in December, received a registered letter early in the year, in accordance with the Taipei city government’s standard operating procedures.
The sender was the Taipei City Government.
He opened the letter to find a thoughtful reminder from the Taipei City Government to new "senior citizen" Lin Chuan informing him that he would soon be eligible to pick up his senior's welfare card, which entitles the bearer to apply for various benefits mid-year and start enjoying them upon turning 65.
On March 13, Lin Chuan got another message, this one an invitation for him to appear under the blinding lights of a press conference announcing him as President-elect Tsai Ing-wen’s choice as premier. The May 20 inauguration will come just over a decade after his resignation as finance minister.
"I was thinking, perhaps I'm a little too old for such a challenging, physically taxing job. But I have no choice. I have to work hard to do it," said Lin. The silver-tongued speaker, who won numerous speech contests as a youngster, continued, saying, "A changeover in ruling political parties includes the ruling party winning a majority (in the Legislature), and with administrative departments promoting reforms, being able to communicate easily with all sectors of society will facilitate opportunities. History has given us an opportunity, and failing to do everything we can to see it through would disappoint the people's expectations."
Lin is Democratic Progressive Party (DPP) chairperson Tsai's go-to expert, as well as a prior member of former President Chen Shui-bian’s core team. As such an obvious choice, it can easily be overlooked that the trusted confidante of two presidents in the past 20-odd years has never actually been a member of the DPP.
"He’s an outsider on the inside," says one observer reportedly tapped for a Cabinet post. A rare species within the DPP, it is exactly this aloofness that has earned him Tsai's deep trust.
Bonding over Snacks
Tsai's trust in Lin goes back to the story of how they first met.
Despite ostensibly having been colleagues at National Chengchi University in the 1990s, Tsai was in the law department and Lin was in the finance department. Thus the two never crossed paths until the year 2000, when Lin Chuan took office as Director of Budget, Accounting, and Statistics, and Tsai Ing-wen left to serve as chairperson of the Mainland Affairs Council.
Interestingly, the pair's first interaction was not over matters of business, but rather took place at the Legislative Yuan.
During the general interpellation and budgetary review periods at the Legislative Yuan, ministers and government agency heads must appear before legislators for general questioning, during which a lot of idle time is spent waiting around to be called. Lin and Tsai, as functionaries in rather unglamorous positions that rarely put them in the line of heavy fire when questioned, also sat next to each other. Both career scholars, with homebody tendencies and the love of a good laugh in private, they found themselves on Tuesdays and Fridays frequently chatting away at the Legislative Yuan. There, Lin Chuan was often enjoyed the biscuits and candies Tsai always had on hand, and the two established a rapport that turned into a friendship.
When Lin Chuan took a new position as Minister of Finance two years later, the two no longer sat together, loosening the bonds they had established.
When the Cabinet resigned together with Premier Frank Hsieh in 2006, Tsai Ing-wen, appointed vice premier under incoming Premier Su Chen-chang, lobbied hard for Lin Chuan to stay at his post, but to no avail. Just one year later, after Tsai stepped down from that post to take a private sector position as CEO of TaiMed Biologics, she asked Lin Chuan to become a company supervisor. This was the beginning of their work together as colleagues.
Following the DPP's trouncing defeat in the 2008 presidential and legislative elections, Tsai resigned from TaiMed to take over as DPP party chairperson. Meanwhile, Lin went back to the private sector, where he was subjected to three years of investigations of second-round financial reforms by investigators and prosecutors. The two had very little contact at this time, and when Tsai was working on formulating her 10-year policy platform in preparation for her (subsequently unsuccessful) presidential bid in 2012, "Lin was only invited to sit in on meetings, and was not a key advisor," relates an insider close to the proceedings.
This situation changed again after Tsai stepped down from the top party post to take responsibility for her election loss, when she went on to establish the Thinking Taiwan Foundation.
Legislator Hsiao Bi-khim relates that in addition to providing positions for key staff members, Tsai set up the Thinking Taiwan Foundation as a policy discussion platform.
Lin had just gotten through with the investigations into the second round of financial reforms, and for the man who coined the phrase "policy is my interest, politics the shadow hanging over me" – a policy discussion platform was just the ticket.
And so Tsai persuaded Lin to become chief executive officer of the Thinking Taiwan Foundation, a position that required working two days a week.
One scholar familiar with Lin relates that the Thinking Taiwan Foundation's policy discussions represented a departure from established practice. Accompanied by an aide or two, Tsai Ing-wen often made fact-finding visits with grass-roots groups and workers. Upon returning, each Friday afternoon Lin Chuan chaired a meeting for scholars, experts, and local workers of all party affiliations to discuss the issues and problems gathered from the visits. The brainstorming was open for foundation members with time and interest to join in and contribute to.
Legislator Ku Li-hsiung observes that Lin is genuinely interested in public issues. "He is an atypical politician, with a clear head and a willingness to get involved in issues," Ku says.
In the workplace, Tsai, five years Lin's junior, has an approachable manner, facilitating interaction and discussion on equal footing and putting people at ease. "It's a learning process," he says.
A Measured Approach
Upon returning as party chairperson in 2014, Tsai enlisted Lin as executive director of the DPP New Frontier Foundation, where virtually every major political subject was discussed.
Established in 1999, the DPP New Frontier Foundation’s officers have traditionally been DPP politicians. However, Lin insisted that the political character of the board of directors be muted, enlisting highly accomplished senior figures from business and industry with no obvious political affiliations. These figures have included former country corporate officer for Citibank, Eric Chen, former Quanta Computer chief executive, Michael Wang, deputy-director of the Taiwan Digital Publishing Forum, Ho Fei-peng, and author Ping Lu.
Upon taking the reins at the New Frontier Foundation, Lin Chuan explained the personnel arrangements to the CommonWealth reporter, saying “The hope is to maintain a certain degree of independence and openness in the think tank.”
How did the relationship between the two change with Tsai as party chairperson? More than one observer in attendance at policy workshop activities relates that little actually did change, and Lin would not back down easily in the face of differences of opinion.
Butting heads with an especially intimidating female legislator at an internal DPP meeting, he once blurted out, "If 'you' DPP people insist on doing things this way, society isn't going to take it well."
In addition to an excellent working rapport, at the press conference introducing Lin as Premier, Tsai said it comes down to communication for the right candidate to put together a Cabinet. "When opinions are divided, he has a knack for getting to the crux of the problem and finding a solution," said Tsai, who admits that, while the two sometimes squabble, they always manage to find common ground.
"Lin Chuan and Tsai Ing-wen are similar people," says one New Frontier Foundation officer. In addition to being homebodies, smart, and funny in private, even more important is that "both are very careful and measured; they don't just take off in their own direction."
Over a decade in politics, Lin's most discussed initiative, the minimum tax burden system, made him the first Minister of Finance since Taiwan’s democratization to raise taxes without having to step down. Despite his unmistakable image as a reformer, Lin always chooses to target reform in the areas with the smallest potential reverberations.
Taking the example of capital gains tax on stocks and securities, while former Minister of Finance Christina Y. Liu backed laws that, while fair and just posed considerable administrative difficulty, Lin's DPP version was similar to the simplified version of a 0.1 percent flat tax. Ultimately, Liu's idealistic capital gains tax reform effort was rejected, sending everything back to the drawing board and becoming a laughing stock in the process.
In a contemporaneous interview with CommonWealth, Lin explained his philosophy, saying that reform at a slower pace is fine as long it moves in the right direction. The key, he said, is that it must ultimately succeed, or risk making future tax reforms more difficult. Lin is on record having predicted that the Ma Ying-jeou administration’s recent capital gains tax restructuring failure would set back efforts at tax reform in Taiwan for a decade, if not longer.
Amid the whirlwind of reform, Lin is adept at finding useful leverage points. However, he invariably elicits criticism for being "overly accommodating."
Lin proposed his minimum tax burden reform plan just as the furor over the second phase of financial reform was at its height. According to the indictment prepared by the Taipei District Prosecutors Office, Lin refused to follow the Office of the President's instructions regarding key exchange ratio and personnel cases. Instead, his protection of state assets enabled him to extract himself from the maelstrom unscathed. However, the indictment also noted that, at the request of the Office of the President, he met with business figures and interfered with business community disputes using his administrative authority. "He kept doing it despite full knowledge that policy had undergone qualitative change,"one scholar criticized.
Lin once confided to a friend that he'd stayed on only to promote the minimum tax burden structure. That reform having succeeded, Lin then made his exit from the world of politics.
"Lin is calm and stable. But what Taiwan needs now is resolute and decisive measures, or Taiwan will spiral downward. But that is not Lin’s style," says one business executive who has observed Lin closely for two years.
The company executive said that Taiwan is in generally worse shape compared to the conditions under which former President Chen Shui-bian's administration took office in 2000. When Chen was president the civil service structure fostered during the Kuomintang (KMT) era remained useful, but now the incoming administration is taking over a personnel system that is roundly unsophisticated and falling apart, with morale at its lowest in a bureaucratic culture that is more narrow-minded than before. Where many issues are concerned, safeguarding the fundamentals is no longer sufficient, demanding new thinking.
Responding to such criticism, Legislator Ku Li-hsiung believes that compared to 2000, Tsai and Lin already have four years of preparation under their belts, as well as a certain degree of familiarity with the difficulties facing Taiwan. "Rather than expecting things from Lin, we should be looking forward to the performance of Tsai’s entire team," he asserts. Speaking forthrightly, he says that the pieces on the chess board favor Tsai at this point, and that there is no time like the present for undertaking reforms.
Society's expectations aside, Legislator Lee Ying-yuan notes that a feeling of accomplishment is running through the DPP following its seizure of a majority in the Legislature for the first time. He says that party trust in Tsai is tempered with the knowledge that actual administration will be a bigger challenge than winning the election. Moreover, agreement is widespread inside the party on even touchy cross-strait issues, with expectations high that the passage of the Cross Strait Agreement Supervisory Act before Inauguration Day on May 20 will help get governance off on the right foot.
From seating companions to partners, we look to Lin Chuan to wield the trust and authority bestowed on him by Tsai Ing-wen to help the DPP build on its election victory momentum and lead Taiwan out of the doldrums.
Translated from the Chinese by David Toman