On July 25, heavy smoke from a huge fire filled the sky above the Formosa Plastics Group's petrochemical complex in Mailiao, a small town in Yunlin County on Taiwan's western coast. The blaze and its smoke sparked anger among local residents, who quickly surrounded the complex and launched a determined protest against the facility's detrimental effect on the area's environment.

The day after the fire, Wilfred Wang, the chairman of Formosa Plastics Group subsidiary Formosa Petrochemical Corp., met with Yunlin County commissioner Su Chih-fen. When the two appeared together before the media, Wang was sitting back on a sofa, his legs crossed and his left arm extended out on the sofa's back, as though he did not have a care in the world.

"To sit cross-legged when meeting Su Chih-fen was like an emperor granting his subjects an audience. It was completely insincere," charged commentator Wang Ben-hu, a friend of Winston Wang, Wilfred's cousin and oldest son of the late Formosa Plastics Group founder Wang Yung-ching.

A week before the fire at Formosa Plastics' complex in Mailiao, as Hon Hai Precision Industry chairman Terry Gou was busy trying to extricate his manufacturing group from a scandal over a spate of suicides at its facility in Shenzhen, China, he had his company's CFO Huang Chiu-ling make a rare public appearance before the media to vent his frustration.

"The chairman felt hurt by criticism from scholars that he was ‘the shame of Taiwan' and believes he is no longer welcomed here. He is postponing his investment plans in Taiwan," said Hon Hai's Iron Lady, quivering slightly as she held the microphone tightly.

Whose Children Are They?

Even earlier, in February 2010, Gou and Acer Inc. chairman J.T. Wang both angrily threatened to move their headquarters out of Taiwan when speculation arose that a proposed Innovation Industry Act would cancel incentives for corporations.

"Others treat their children as treasures, but we treat our children like fodder," Gou complained at the time.

To the average person, these entrepreneurs' angry words, bewilderment at not being treated with greater respect, and sense of being wronged makes them look like spoiled businessmen who have already received preferential treatment but feel they are entitled to more.

"Those statements are like a daughter who tells her parents that if they do not give her a certain monthly allowance, she will become the daughter of another family. How can that be? Taiwan is the father and mother of these companies," one economist displeased with these entrepreneurs' attitudes says privately.

Last summer at this time, K.Y. Lee, the head of the BenQ Group, was planting rice under a hot sun. Lee, believed to have a strong Taiwan-centric consciousness, buys a large volume of Taiwanese agricultural products and searches for Taiwanese music every year to present as gifts to guests. Recently, however, he has been portrayed as an arch-villain who is appropriating the land of farmers in Taichung County's Houli and forcing residents of the community of Siangsiliao in Jhanghua County's Erlin Township out of their homes.

Last week, the Taipei High Administrative Court ruled that the Central Taiwan Science Park's third and fourth expansion phases (in Houli and Erlin respectively) be halted, leaving BenQ Group member AU Optronics (AUO), Taiwan's second largest maker of liquid crystal displays, in a bind. "How many governments does Taiwan have?" a stunned Lee asked, but he politely declined to be interviewed by CommonWealth Magazine, not wanting to fuel the fires any further at this sensitive time.

Four years ago, Lee said with a sigh, "Society has some resentment of the rich, but reaching this point is actually very bad. The wealthy were resented in traditional Chinese society. Who in China's history books wrote about entrepreneurs or merchants?"

Those words seem even more appropriate today.

The New Hostility toward Business and the Rich

To say, however, that businesses put the money they earn in their own pockets while passing off the costs of pollution to society may not be fair.

The amount companies have given back to Taiwan in recent years has increased rather than decreased. Within a week after Typhoon Morakot devastated southern Taiwan in August 2009, companies donated more than NT$3 billion. Formosa Plastics, AUO, and Hon Hai all donated more than NT$100 million. Some corporate leaders even led their employees into disaster zones to help with relief efforts and reconstruction.

But is there really hostility in Taiwanese society toward businessmen and the wealthy? Not necessarily.

A survey conducted four years ago found that the people most revered by the younger generation were entrepreneurs. This month, in a poll on whom children considered an ideal father, three out of the top five choices were businessmen.

But whether it is HTC facing fierce protests every time it holds a press conference, or scholars criticizing Foxconn Technology (the name used by Hon Hai Precision in China) for its military-style management, or Academia Sinica academicians opposing the Kuokuang petrochemical development project, Taiwanese companies have seemingly run into an invisible wall, catching flak no matter what they do.

This is in stark contrast to China, where governments at every level compete to gain favor with these leading entrepreneurs, fawning over their every need. In Taiwan, on the other hand, they are seen as criminals who expropriate farmers' land and pollute the environment.

BenQ Group chairman Lee recently described Taiwan's OEM companies as "wolves." Wolves constantly pursue lower cost territories, and once they have plundered them, they quickly move on to the next fertile area. The nomadic nature of Taiwan's manufacturers has helped Taiwan gain a firm foothold in the global industrial supply chain and play an indispensable role within it.

This type of "predatory" development, however, is starting to face new challenges and resistance, not only in Taiwan, but even in China and Southeast Asia.

The Challenge to ‘Predatory' Development

The pale sun sets over a green, windswept sugar cane field. Just five minutes away from this Taiwan Sugar Corporation field is the home of Erlin resident Chuang Po-cheng. Pointing to a spot about 200 meters behind his backyard, Chuang says anxiously: "In the future, that's where AUO's water treatment plant will be. What does AUO contributing to GDP growth have to do with me? When tilapia swim to places were wastewater is discharged, they will die."

Lin Thung-hong, an assistant research fellow in Academia Sinica's Institute of Sociology, says that Taiwanese society is no longer as concerned with GDP growth as it has been in the past, as people put a greater priority on the type of lives they lead and whether they can preserve the land and lifestyle they know.

Businessmen, who are busy traveling the globe in pursuit of orders and trying to squeeze out a profit perhaps have not noticed that Taiwanese society is evolving. Although local residents still care about prices, they are also pursuing a diversity of values that can help them attain a good life.

Government Yields ‘People's Interests' to Companies

Another reason businesses have been blindly ramming into this big wall is the government. Taiwan's people widely believe that the government, from expropriating land to setting tax policies, heavily favors corporations and makes too many concessions to business. Not only that, the interests they are conceding are those of the people, says commentator Nan Fang Shuo.

A native of Yunlin County, fisherman Lin Ching-yi regularly heads to the coast outside Formosa Plastics petrochemical complex to fish. Since the days of his grandfather, the family has raised clams there. Lin says that since the petrochemical complex began operating (in 1999), he has had to wait increasingly longer periods of time before being able to harvest his clams. The July 25 fire deepened his feeling that not only is making a living growing more difficult, but life itself is under threat. "I feel that living here will cut my life span by many years," he says.

The day after the major blaze, Lin joined the protest outside the Formosa Plastics facility.

"The government should listen to the voices of the people rather than only looking after companies. It has not heard about the hardships of the people. Just because you have money doesn't mean you're special," he told CommonWealth Magazine.

The government has been criticized by the people for a tax policy that seemingly favors businesses.

In Taiwan, salaried workers form the backbone of the tax base, with its 9 million workers paying 72 percent of the country's income tax. That's far higher than the United States, where workers pay only 56 percent of the total. Companies, on the other hand, benefit from a full range of tax incentives and have seen their tax burden grow progressively lighter. The 10 most profitable companies in Taiwan in 2009 paid an average corporate income tax rate of less than 10 percent.

Turning Over Expropriated Land to Companies

"It's like living in a big community development and paying higher management fees but seeing the community's wealthy who pay lower management fees receiving priority in using the facilities. How can you not feel perturbed?" says a local media veteran. Every year, Taiwan's government expropriates land 52 times the size of Da-an Park in downtown Taipei to make available for corporate use, but ordinary people feel no benefits from developing the land. Also, the government and businesses have never clearly explained the true benefits and costs of development.

The petrochemical industry, for example, has had an output value of more than NT$3 trillion over the past 10 years. Though the figure may sound impressive, the industry in fact is accounting for a progressively smaller percent of GDP, and the number of people it employs has gradually declined, from 570,000 in 1999 to 440,000 in 2009.

Taiwan's flat panel industry has grown 16-fold within the past eight years and has exported more than NT$200 billion in goods, but it still accounts for less than 3 percent of the country's direct exports.

Based on CommonWealth Magazine calculations, once newly planned projects pass environmental impact assessments and begin operations, Taiwan's petrochemical and flat panel sectors alone will use enough water to supply 5 million people a day and will need 170,000 Da-an Parks to completely absorb the carbon dioxide emissions they emit.

Also, AUO, rival panel makers Chimei Innolux and Chunghwa Picture Tubes, and the Formosa Plastics Group's big four (Formosa Plastics, Formosa Petrochemical, Nan Ya Plastics, and Formosa Chemical and Fibre) paid less than 3 percent of Taiwan's total corporate income tax revenues because of loss and investment offsets.

Society's skepticism toward major development projects stems from the government's lack of a national "balance sheet" that takes into consideration environmental costs, industrial competitiveness, land planning, and other key factors in determining the kinds of industries Taiwan needs.

Corporations must also recognize that the main force behind the wall that is impeding their development in Taiwan is a shift in mainstream values.

Preferring to Raise Clams

The community of Fanwa in Jhanghua County's Fangyuan Township is an important clam farming center in Taiwan, but it also has been chosen as the site for the Kuokuang petrochemical project.

Twelve kilometers away to the south, the lights of Formosa Plastics' petrochemical complex shine brightly, as majestic as a kingdom. But of the county's 61 kilometers of coastline, Fanwa is the only spot untainted by heavy industry.

Thirty-six year-old Huang Sung-po, a third-generation clam farmer, began learning his trade as an elementary school student at his father's side. His one-hectare clam farm earns him more than NT$1 million a year, enough to raise his family of eight. In the future, Huang plans to hand over the business to his family's next generation.

"If the government insists on building the Kuokuang petrochemical facility, we will have to leave this land on which we have all been raised," Huang says, nearly choking up.

 The Shortest Dynasty

Vice Economics Minister Hwang Jung-chiou, who served in the Ministry of Economic Affairs' Department of Industrial Technology for many years and the State-Owned Enterprise Commission for another two, observes that when he was with the Industrial Technology Department, he spent all his time with high-tech companies, leaving him thinking that Taiwan's economic development was all about high-tech. It was only after he joined the State-Owned Enterprise Commission that he came in contact with unions and local political leaders and realized that an economy's vitality relies on the grass roots of society.

"Companies make decisions based on global competitiveness. Midstream and downstream manufacturers have all gone, so companies can only develop upstream. How Taiwanese enterprises look back and examine themselves and blend in with society is the question everybody is pondering," Hwang says.

Taiwan's entrepreneurs were once compared to Genghis Khan, conquering the world and enjoying success wherever they went. But the Yuan Dynasty, founded by the nomadic Mongolians, was the shortest of all of China's dynasties and eventually relinquished its land to farming peoples. Wolves, inevitably, are forced to become human in the end.

Additional research by Jerry Lai

Translated from the Chinese by Luke Sabatier