Editing Dutch Formosa (section)

===Piracy (1620s-1630s)===
The Europeans worked with and also fought against Chinese pirates. The pirate Li Dan was the mediator between Ming Chinese forces and the Dutch at Penghu. In 1625, VOC officials learned that he had kept gifts they had entrusted him with giving to Chinese officials. His men also tried pillaging junks on their way to trade in Taiwan. One Salvador Diaz acted as the pirates' informant and gave them inside information on where junks leaving Tayouan could be captured. Diaz collected protection money as well. A Chinese merchant named Xu Xinsu complained to Dutch officials that he was forced to pay 2,000 taels to Diaz. Li Dan's son, Li Guozhu, also collected collection money, known as "water taxes". Chinese fishermen paid 10 percent of their catch for a document guaranteeing their safety from pirates. This caused the VOC to also enter the protection business. They sent three junks to patrol a fishing fleet charging the same fee as the pirates, 10 percent of the catch. This was one of the first taxes the company levied on the colony.{{sfn|Andrade|2008b}}

In July 1626, the Council of Formosa ordered all Chinese individuals living or trading in Taiwan to obtain a license to "distinguish the pirates from the traders and workers".{{sfn|Andrade|2008b}} This residence permit eventually became a head tax and major source of income for the Dutch.{{sfn|Andrade|2008b}}

After Li Dan died in 1625, [[Zheng Zhilong]] became the new pirate chief. The Dutch allowed him to pillage under their flag. In 1626, he sold a large junk to the company, and on another occasion he delivered nine captured junks as well as their cargos worth more than 20,000 taels. Chinese officials asked the Dutch for help against Zheng in return for trading rights. Company officials were told that if they refused their help, their main Chinese trading partner, Xu Xinsu, would no longer be permitted to trade with the company but would instead "be destroyed along with his entire family." The company agreed and the Dutch lieutenant governor visited the officials in Fujian to inform them that the Dutch would drive Zheng from the coast. However, the Dutch were too late, and Zheng attacked the city of Xiamen, destroying hundreds of junks and setting fire to buildings and houses. Considering Zheng too strong to fight, in 1628 the Chinese authorities awarded him with an official title and imperial rank to appease him. Zheng became the "Patrolling Admiral" responsible for clearing the coast of pirates. He used his official position to destroy his competitors and established himself in the port of Yuegang. In October 1628, Zheng agreed to supply silks, sugar, ginger, and other goods to the company in return for silver and spices at a fixed rate. Then the Dutch got angry at Zheng, who they were convinced was trying to monopolize trade to Taiwan. His promised "disappeared into smoke".{{sfn|Andrade|2008b}} In the summer of 1633, a Dutch fleet and the pirate Liu Xiang carried out a successful [[Battle of Liaoluo Bay#Dutch surprise attack|sneak attack]] on Zheng's fleet. Zheng believed that he and the Dutch were on good terms and was caught off guard; his fleet was destroyed.{{sfn|Andrade|2008b}}

Zheng immediately began preparing a new fleet. On 22 October 1633, the Zheng forces lured the Dutch fleet and their pirate allies into an ambush and [[Battle of Liaoluo Bay#Chinese counterattack|defeated them]].{{sfn|Wong|2017|p=50}}{{sfn|Onnekink|2019|p=79}} The Dutch reconciled with Zheng, who offered them favorable terms, and he arranged for more Chinese trade in Taiwan. The Dutch believed this was because of Chinese fears of piracy. The pirate Liu Xiang still fought against Zheng, and when the Dutch refused to help him, Liu captured a Dutch junk and used its 30-man crew as human shields. Liu attacked Fort Zeelandia but some Chinese residents warned the company and they fought off the pirates without any trouble. In 1637, Liu was defeated by Zheng, who established primacy over the Fujianese trading world. He continued to have a hand in the affairs of Taiwan and aided the growth of the Chinese population there. He made plans with a Chinese official to relocate drought victims to Taiwan and to provide each person three silver taels and an ox for every three people. The plan was never carried out.{{sfn|Andrade|2008b}}