The Chinese Nationalist Party’s (KMT) former financial prowess stemmed from concessions that the party granted businesses it operated, as well as a “special foreign exchange” regimen that applied exclusively to KMT members during the party-state era, which was independent of the regular foreign exchange system, academics said.
Speaking at a symposium last week focusing on democracy pioneer Fu Cheng (傅正) and the KMT’s assets, Taiwan Institute of Economic Research southern branch director Jason Kao (高仁山) said that the KMT regime shortly after it arrived in Taiwan created a special foreign exchange system.
The system allowed KMT-run businesses to bypass restrictions that the party otherwise imposed on foreign currency transactions, imports and exports, which in turn helped them gain an advantage over their competitors and monopolize the market.
While the special foreign exchange system was only available to businesses run by KMT members, other businesses often resorted to bribery and undue networking to be included in the system, which led to the rise of special foreign exchange brokers, negatively affecting the economy, people’s livelihoods and the sociopolitical climate, Kao said.
The KMT meddled with monopolistic state-run enterprises, such as CPC Corp, Taiwan, Ill-Gotten Party Assets Settlement Committee deputy researcher Yang Chen-yu (楊鎮宇) said, adding that CPC paid NT$1 commission for every NT$8.5 it made through the sale of liquefied petroleum gas (LPG) and natural gas in the 1970s to KMT-operated Ruei Hua Co (瑞華公司), the KMT-appointed “official distributor” of fuels.
Ruei Hua Co was dissolved in 1978 and replaced by the now-defunct department of liquefied gas supply under the Veteran Affairs Council, which continued to levy commission for the KMT’s benefit and paid “rent” to the KMT and its Yu Tai Co (裕台公司), which owned most of the land on which gas filling plants were located, Yang said.
Even though the sale of LPG was opened to free competition in 1993, it was not until KMT-controlled Central Investment Co and Kuang Hua Co (光華公司) in 2002 disposed of shares they held in other LPG firms that the KMT officially withdrew from the business, he said.
KMT-operated businesses that profited from LPG sales since 1971 included Central Investment Co, Ruei Hua and Kuang Hua, which together founded Shin Shin Natural Gas Co (欣欣天然氣) and 11 other LPG companies, Yang added.
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