Taiwan looks likely to succeed in pushing through the share sale to boost its coffers
Among the world's democracies, Taiwan is unique. Its political parties define themselves in the context of China's revolutionary past, rather than as champions of a particular economic class or philosophy. But while the bickering between the independence-leaning Democratic Progressive Party (DPP) and opposition Kuomintang continues to centre on relations with communist China, more mundane economic matters occasionally intrude.
One such example is the partial privatisation of Chunghwa Telecom, which the DPP-led government wants to swell its coffers but unions bitterly oppose.
It remains longstanding policy to protect what the Taiwan government deems to be strategic industries, including telecoms. Foreign ownership in Chunghwa is limited to 40 per cent. The limit has the added benefit of creating a perceived scarcity of equity - be it through direct or listed shares - of state-owned firms the government seeks to privatise.
Previous attempts to sell Chunghwa shares both locally and overseas have failed due to pricing, with the government persistently holding out for prices investors have been unwilling to pay.
Foreigners currently hold just less than 23 per cent of Chunghwa's shares, and the planned sale of American depositary receipts (ADRs) will increase foreign ownership to the 40 per cent limit. Foreign shareholders also own 31 per cent of Taiwan Mobile and 30 per cent of Far Eastone, according to data compiled by CLSA.