Taiwan: President Ma in tight election race with DPP’s Tsai; outcome could influence US-China relations

Updated On: Jan 10, 2012

Tens of thousands of Taiwanese paraded throughout the island on Sunday, supporting their favoured presidential candidates. President Ma Ying-jeou faces Democratic Progressive Party (DPP) candidate Tsai Ing-wen, in what is expected to be a neck-to-neck race in the coming 14 January elections. The outcome of the elections could have a direct bearing on the geopolitical situation in East Asia as well as the larger US-China relationship.

President Ma highlights benefits of pro-China policies, but faces obstacles

Polls indicate that President Ma of the ruling Kuomintang (KMT) is in a deadlock with Tsai Ing-wen of the opposition DPP, ahead of Saturday’s election.

During his term, Ma has connected Taiwan’s high-tech economy closer to China’s vast markets through a series of programmes, including a comprehensive tariff-slashing agreement and the starting of hundreds of weekly cross-strait flights. These are seen to have lowered tensions with China.

“Since I took office, cross-strait relations are no longer confrontational and have reached their best in 60 years,” Ma said during the rally. “Having improved relations with China isn’t a miracle drug, but we can see it is not something that only holds risks, but has benefits as well.”

President Ma argues that Taiwan's current economic situation would be far worse without the trade agreements with China. His campaign has focused on his achievements in enhancing Taiwan's international profile after many years of diplomatic setbacks as China, which sees the island as a renegade province, sought to isolate it.

Nonetheless, President Ma faces numerous obstacles. When he signed the landmark Economic Cooperation Framework Agreement with China in June 2010, President Ma promised that it would create jobs and promote growth by attracting Chinese investment and tourists. However, unemployment remains above 4%, higher than the 3% promised by President Ma; wages have stagnated and the economy is expected to slow, making the ECFA an electoral liability at a time when Taiwan’s export-oriented economy is affected by economic doldrums in the US and Europe.

Trade with China is also slowing sharply, with Chinese investment insignificant. At the same time, a small but politically significant widening of the income gap have fuelled perceptions among low-wage workers that trade with China has benefited the rich at the expensive of the less well-off. Adding to this view are skyrocketing property prices in Taipei and other major cities.

While many in Taiwan see China as key to their country’s economic future, they are distrustful of their neighbour and are leery of any political integration with China. President Ma faces misgivings among some that he will move to formally align Taiwan with China and reduce its de facto independence.

President Ma receives major boost

At the same time, President Ma’s campaign has obtained a boost when he unexpectedly was backed by a close friend of James Soong, an independent candidate who has caused jitters among KMT members and backers because of overlapping support bases, with some concerned it could the Taiwanese President his re-election.

Fu Kun-chi, an influential official in east Taiwan’s Hualien county, said that despite his admiration for Mr. Soong, he believed President Ma was the best choice for Taiwan as he believes President Ma is well-suited to guide the country through economic uncertainty.

“The eurozone crisis will be a crucial test for Taiwan. We can by no means afford a recession,” Mr. Fu told a campaign gathering for Ma. “For Taiwan’s future, the public should bravely step up at this critical moment to support Ma Ying-jeou,” he said.

Mr. Fu’s backing is advantageous to the KMT, given that the election is expected to be a very tight one and President Ma needs all the support he can get.

Tsai Ing-wen a formidable contender

Ms. Tsai has capitalised on the disappointments of the Ma Presidency. She has attacked President Ma’s economic policies for causing income inequality and making it difficult for young Taiwanese to afford decent housing, while promising more jobs for low-income workers, low-cost housing and improved education.  Her campaign has been well received by voters, with her ratings trailing President Ma’s by a razor thin margin.

Ms. Tsai has also emphasised domestic issues in her campaign, and has avoided talk of independence, unlike former president Chen Shui-bian. Ms. Tsai said she would set up a task force on dialogue with China if elected, and promised to seek consensus within Taiwan on their relations.

Despite her popularity, Ms. Tsai faces increasing doubt on whether Taiwan could continue the China trade agreements if she is elected. Unlike President Ma, she has refused to renounce possible moves to formalize the island’s de facto independence, much to China’s irritation. These factors add to concerns that Chinese wariness of the DPP may hamper her ability to nurture economic ties with China that are considered crucial for Taiwan’s economic security.

Report: Taiwanese attend rallies to support presidential candidates as tight race hits home stretch (Washington Post, 8 Jan 2012)

Report: Ma Touts Better China Ties as Candidates Make Final Push in Taiwan Polls(Bloomberg, 9 Jan 2012)

Report: Taiwan president gets surprise campaign boost (AsiaOne, 9 Jan 2012)

Report: China a Sticky Point in Taiwan Vote (Wall Street Journal, 9 Jan 2012)

Implications for US-China relations

The Taiwanese presidential race is being closely monitored in the US and China because it could deliver a result that adds to frictions in US-China ties in an already challenging year.

The US does not want to see more tension between China and Taiwan as it moves ahead with its presidential election whilst being locked in disputes with China over trade, currency, security and military issues.

China faces its own leadership transition in late 2012, and Chinese assistance and cooperation in reining in the nuclear ambitions of North Korea and Iran could be less forthcoming if strains over Taiwan increase.

The re-election of President Ma would see Taiwan expanding economic integration with China, building upon the landmark pacts which opened trade, air travel, tourism and postal links since he assumed office in 2008.

Both Beijing and Washington have welcomed President Ma’s initiatives to foster cross-strait relations. The US sees the rapprochement as easing a security problem that could cause a military conflict with China. Although the US has officially taken no sides in the election, its recent decision to make Taiwan a candidate for visa-free travel and a visit by the Deputy Secretary of Energy are widely interpreted in Taiwan as implicit support for President Ma.

On the other hand, Ms. Tsai’s victory at the polls could rattle nerves in China, as a result of the 2000-2008 tenure of former President Chen Shui-bian, whose strong support for Taiwan’s independence enraged Beijing and raised tensions across the Taiwan Strait.

Taiwan-friendly American lawmakers and US-based supporters of Ms. Tsai have pressed the Obama administration to maintain a strict policy of neutrality in the coming election, in light of recent high-level visits to Taiwan by US officials toward the end of 2011. In response, the State Department restated testimony to Congress by the top US diplomat for Asia that Washington “does not believe that any one party or leader on Taiwan has a monopoly on effective management of the US-Taiwan relationship.”

Some analysts however sought to downplay the possibility of spiralling tensions. Bonnie Glaser, a leading US scholar on Taiwan issues, asserted that worries about mounting tensions after Saturday’s vote are exaggerated even if Ms. Tsai wins, because both Taipei and Beijing have learned from previous episodes, and she views Ms. Tsai as “pragmatic.”

Chen Chao-chien, professor of public relations at Ming Chuan University, commented that Beijing's reaction to a victory by Ms. Tsai would be determined by the margin. "Beijing will be dismayed and could slow down cross-strait talks for a few months. But it could also offer more economic sweeteners to test the DPP's bottom line," he said.

On the other hand, Gerrit van der Wees, editor of the pro-DPP Taiwan Communique newsletter, called on US policymakers to stay focused on Taiwan’s fate beyond the election and ensure that China “does accept Taiwan as a friendly neighbour and does not kick up a storm every time there’s an election or change of government in Taiwan”.

Report: U.S. neutral but closely watching key Taiwan vote (Vancouver Sun, 9 Jan 2012)

Report: China a Sticky Point in Taiwan Vote (Wall Street Journal, 9 Jan 2012)

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