In a race that will be closely watched globally for military and economic implications, billionaire tech businessman Terry Gou has lost his bid to represent the opposition Nationalist Party in Taiwan’s presidential election next year, Taiwan’s Central News Agency reported today.

The Nationalists, also known as the Kuomintang, or KMT, today nominated New Taipei City Mayor Hou Yu-ih as the party’s presidential candidate. Hou will face Taiwan Vice President Lai Ching-te, the candidate of the ruling Democratic Progressive Party, and former Taipei Mayor Ko Wen-je of the smaller Taiwan People’s Party in elections scheduled for January.

Beijing claims sovereignty over the ruling island of 24 million people, and stepped up military exercises around Taiwan following a visit by then-Speaker of the US House of Representatives Nancy Pelosi last August. Relations between the U.S. and China have recently soured further over Beijing’s close relationship with Russia, its questionable deployment of a spy balloon over militarily sensitive parts of the U.S. and raids on U.S. consulting and intelligence firms in the country, among other issues.

A rags-to-riches entrepreneur, Gou also ran for president in 2019, invoking the message of the sea goddess Matsu, only to lose and then leave the KMT. His image as the successful founder of Hon Hai Precision, one of the world’s largest contract manufacturers and a key supplier to Apple, was tarnished late last year by labor trouble at the company’s huge iPhone factory on the mainland. Hon Hai’s investment plans in Lordstown Motors in Ohio they also faced setbacks. Lordstown’s Nasdaq-traded shares have lost 87% of their value in the past year.

Gou is ranked 317th Forbes list of billionaires for 2023 unveiled last month with an estimated fortune worth $7.2 billion. He stepped down as chairman of Hon Hai in June 2019, after 45 years at the helm.

The billionaire businessman, who formally sought the KMT nomination starting in April, pledged to support a triumphant Hou. “I will keep my promise and do everything I can to support Mayor Hou to win the 2024 general election and get rid of the incompetent government,” Gou said in a Facebook post, according to CNA.

Taiwan’s current president Tsai Ing-wen, who ranked 17th on the latest Forbes list 100 most powerful women in the world last year, she cannot run for office again because of rules that limit her to two four-year terms.

The stakes are high. Taiwan is the world’s 22nd largest economy and a vital source of semiconductors. Its chip industry leader Taiwan Semiconductor Manufacturing, or TSMC, one of the world’s largest chipmakers, plans to invest $40 billion — one of the largest expenditures by a foreign company in US history — at a facility in Arizona. Warren Buffett’s Berkshire Hathaway said in a filing this month that it had sold its entire stake in TSMC amid concerns about Taiwan’s future, reports state.

Other Apple suppliers from Taiwan, besides TSMC and Hon Hai, include Pegatron, Lite-On Technology, Inventec, Catcher Technology, Largan Precision and Compeq Manufacturing.

Differences between the KMT and the Democratic Progressive Party in mainland policy may be more perceived than real, Gallup pollster Tim Ting said in an interview last December. (See earlier post here.) The KMT is strong in northern Taiwan, where many mainland families settled in the late 1940s after then-KMT leader Chiang Kai-Shek lost a civil war to the Communist Party’s Mao Zedong and moved his capital to Taipei.

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