There is an ostensible air of change on the streets of Taipei tonight. After all, the ruling KMT has had to cede power in presidential and legislative elections to the opposition, traditionally independence-leaning DPP led by its tenacious, wonkish leader, Dr Tsai Ing-Wen. It is noteworthy that the KMT has been in power since Chiang Kai-Shek’s KMT decamped to Taiwan in 1949 after defeat by the CCP on the mainland. The election results are then, a momentous one in Taiwanese history, for it not only represents the first time that the KMT has lost its overall majority in the Legislative Yuan, but also means that Dr Tsai now has the unprecedented honour of being the first Chinese woman to hold office in the Chinese-speaking world without any prior political pedigree. She is neither a scion of a political dynasty, unlike Park Geun-Hye of South Korea, who is the daughter of the late dictator, Park Chung-Hee. The result had been almost guaranteed months ago, as opinion polls presciently showed Dr Tsai holding a resounding lead over her main contender, Mr Eric Chu of the KMT. The jubilation and buoyant mood may resonate amongst many Taiwanese for days to come, and the electorate will continue to see Dr Tsai as the one to bring Taiwan forward. Yet, as Ms Tsai so aptly put it in her victory speech, “reforms don’t happen in a day.” In the wake of the elections, it is thus an opportune moment for us to consider the potential repercussions the DPP victory may have on regional stability, as well as the numerous economic and political tribulations Dr Tsai’s administration may face in its tenure.
When one broaches on the topic of Chinese territorial ambitions and growing political muscle these days, issues like the South China Sea and Senkaku-Diaoyu Islands dispute come to mind. It seems that the festering, unresolved issue of cross-strait relations between China and Taiwan have taken a back seat. Then again, we should remind ourselves that the tenures of President Lee Teng Hui in the late 1990s and Dr Tsai’s predecessor, Chen Shui-Bian, were marked by an escalation of tensions between China and Taiwan over the two men’s decision to deviate from the status quo and seek greater recognition of Taiwan globally.
Taiwanese-Chinese relations have always remained a sensitive, fractious issue since the conclusion of the Chinese civil war. To bring things into perspective, it is worth harping on the fact that Taiwan, or Formosa, was annexed from then imperial China by the resurgent Japanese in the first Sino-Japanese war of 1895, who then went on numerous conquests across Asia in the decades that followed. After the conclusion of WW2, civil war broke out on the mainland between the Communist forces led by Mao Tse Tung, and the Republican KMT forces, allied with the Americans, led by Chiang Kai-Shek. Resoundingly defeated, the KMT then fled across the Taiwan Straits, establishing what is now the modern-day Republic of China or Taiwan. Taiwan was recognized as the legitimate representative of the Republic of China at the UN Security Council and was accorded the permanent member status in place of the communist CCP in Beijing. In the 1970s however, with the thaw in relations between the US and China, the UN switched diplomatic recognition to Beijing which left Taiwan isolated internationally, till today.
It is only natural that there are festering tensions between both sides, who are technically still at war (there was never an armistice signed). Beijing views Taiwan as a renegade, breakaway province to be reunified with the mainland by force, if necessary. Taiwan remains stuck in an awkward limbo of neither recognizing Beijing’s jurisdiction nor formally declaring its sovereign status. Beijing has remained recalcitrant and unwavering in its determination to regain the territory while the KMT’s old allies, the US, has set in stone its resolution to defend Taiwanese interests through the passing of the Taiwan Relations Act. Inevitably, just like the old Cold War disputes of Berlin and Cuba, Taiwan has remained to this day a potential flashpoint for superpower rivalry. It was only back in 1996 when the Chinese had provocatively fired missiles into the Straits of Taiwan to intimidate Taiwanese and attempt to influence the Taiwanese election results which led to an immediate American reprisal of naval deployments in the Taiwan Straits to send an unequivocal message to Beijing of its unshakeable commitment to Taiwan.
Under the stewardship of KMT President Ma Ying Jeou, Taiwan oversaw a dramatic détente with China, through numerous signings of trade and services pacts that closely integrated the two economies, culminating in a historic landmark meeting between Chinese President Xi Jinping and Ma. This was a 360 degree shift away from the pro-independence advocacy of the DPP’s controversial leader, Chen Shui Bian. The KMT have traditionally been advocates of reunification, unlike the DPP, albeit under its terms. As such, it adheres strictly to the ‘one China’ principle and the 1992 Consensus struck between Beijing and Taiwan, where the two sides agreed to disagee in their differing interpretations of the meaning of ‘One China’.
Clearly, China must have played its cards astutely, shifting from the ‘stick’ approach of assertiveness and stridency to that of the ‘carrot’- economic engagement with Taiwan. If one were to read the Chinese administration’s current cross straits policy, it must surely go like this: seek economic engagement with Taiwan, intertwine the two economies to build Taiwanese reliance on China’s economic prowess to accelerate the inexorable process of political reunification. Many Taiwanese however, see through this and have become increasingly apprehensive of the prospect of closer economic integration with the mainland, fretting that the intertwining of the two economies will lead to the reunification that Beijing pines for and Taiwan dreads. This was very much manifested in Taiwanese students’ Sunflower Movement occupation of the Legislative Yuan in protest of the trade pact Mr Ma had signed with China that would lead to increased interdependency on Beijing, as well as the repudiation of Mr Ma’s diplomatic engagement with China through the trouncing of the KMT in municipal elections last year. It is thus, easy to gauge general Taiwanese sentiment and understand why the KMT has sunk to the nadir of its popularity: young Taiwanese polled today feel more Taiwanese than Chinese, as compared to sentiments on identity expressed a decade ago. Like the Umbrella Movement protesters in Hong Kong, many of the younger generation in both countries have a distinct sense of national identity and express profound apprehension of Beijing’s intentions. It is only natural for the majority of Taiwanese to root for the pro-independence DPP.
This is where I will move to explore in detail Dr Tsai’s track record and thus, analyse the resulting diplomatic implications for her administration. The election of Dr Tsai will surely alarm Beijing given her party’s roots in advocacy for independence. Ms Tsai herself, unlike her KMT opponents, continues to refuse to acknowledge the 1992 Consensus, stating that the “One China principle is one option but not the only one in the question of cross strait relations’. The 1992 Consensus has always been a bedrock for cross-strait relations and any outright denial of the one China principle will surely set back hardly earned goodwill and accommodation.
While Dr Tsai has been pragmatic and sought to reassure the US, Japan and indirectly, China, on its determination to maintain the status quo of good, stable relations with Beijing and to further cooperation in the economic and diplomatic fields, it is one thing to win the electorate over with a moderate stance and another altogether to attempt to appease party hardliners. Would Dr Tsai prove to be another disaster in the making, as Chen Shui Bian did? After all, Mr Chen, like Dr Tsai, took a conciliatory tone during his inauguration, opening up Taiwan to Chinese investments although towards the denouement of his tenure, the nationalist rhetoric spiked in what was surely an attempt to drum up support amongst the party’s key support bases through its pro-independence advocacy.
I would choose to believe not so and urge Beijing not to act capriciously, but instead, act pragmatically to reach out its feelers to Dr Tsai. The natural inclination for Beijing upon news of a DPP landslide victory would surely be to tighten the noose on the DPP. These could be done through avenues like leveraging on its political and economic clout globally to decimate Taiwan’s already limited diplomatic space (Taiwan only has formal relations with 20 odd countries) or seek a range of reprisals short of direct confrontation such as squeezing economic concessions (disengaging from dialogue, investment into Taiwan, and cutting tourism figures). That would be disastrous for a Taiwan already in dire economic straits. Not only would such a move be detrimental for Taiwan, it would also serve to antagonize relations further between the Taiwanese people and China and drive them further apart from reunification, something China would surely not want.
As such, China should follow Dr Tsai’s lead in seeking communication and continued engagement with Beijing. Already, there have been low level talks between the DPP and officials in Beijing. That is promising and rightly so, given that Dr Tsai has had a track record of having experience in international relations, serving as a government official for the KMT back in the 1990s as a trade negotiator in Taiwan’s attempts to join the WTO, as well as serving as Chair of the Mainland Affairs Council under Chen Shui Bian’s administration. It is very well in China’s interests to choose continued communication over coercion and seek to build rapport with a moderate like Tsai. She has reciprocated by assuring that she will maintain the status quo of signing of trade accords with China and continue such moves, albeit with greater public consultation, discussion and transparency. President Xi Jinping and Mr Ma can help Dr Tsai along the way, if only they could recognise that continued cooperation and dialogue in the economic and political sphere will not only ease tensions across the Taiwan straits, but also eliminate a potential flashpoint for conflict in the Asia-Pacific, at a time when China already has its hands full with the South China Sea. Furthermore, it should come naturally to President Xi that peace and prosperity come hand in hand. The former is a precondition for the latter. Mr Ma can help facilitate this by acting as interlocutor between the incoming DPP administration and Beijing to discuss further avenues of cooperation that are amenable to both parties.
Treading the diplomatic tightrope is de rigueur for Taiwanese leaders, but Dr Tsai has had the dubious honour of having to contend with a Taiwan mired in dire economic decline. The increasingly intertwined economies of China and Taiwan have led to a slump as a result of slowdown in growth in China. Taiwan has had to slash growth forecasts and analysts predict it would be fortuitous for it to achieve even 1 percent growth this quarter. Wages have stagnated despite the rise in price levels, while income inequality is burgeoning. Housing prices have ballooned to the extent that almost 66% of household incomes per month are used to pay off mortgages. Little surprise then, that despite the KMT’s long-proclaimed reputation as the guardians of Taiwan’s economy, its policy of economic interdependency with Taiwan is reaping little benefits for the territory and has earned the KMT the enmity of the Taiwanese public for its incompetence under Mr Ma’s tenure.
The DPP has yet to unveil a coherent policy strategy on the economy but she has mentioned a revitalized ‘Go South’ policy as a cornerstone of any blueprint for growth, originally the brainchild of former President Lee Teng Hui, to diversify the Taiwanese economy away from over-reliance on China as a driver of Taiwanese economic growth to that of engagement with the Indian subcontinent and ASEAN, as well as possible accession to the TPP. Those moves too, are fraught with challenges.
It has been made abundantly clear that Taiwan’s dire economic straits are a result of its over-dependency on a slowing Chinese economy. As such, any first move would be to reduce reliance on the volatile Chinese economy and diversify its trade though greater interconnectivity with the regional and global trading systems through more trade pacts. Yet, the path ahead is lined with obstacles, one created by China. Taiwan maintains diplomatic relations with only 20 odd nations, resulting in a dearth of free trade deals. This is largely due to China’s objections of the international community engaging with Taiwan on such substantial affairs as it still views Taiwan not as a separate political entity, but a renegade province. Ms Tsai has advocated enthusiastically for Taiwan to join the Trans-Pacific Partnership (TPP), a trade pact consisting 12 members of the Asia Pacific region, despite its status. The TPP, originally mooted by the US, has deliberately sought to exclude China. Would China allow Dr Tsai to follow through with its plans to accede to the TPP and bring Taiwan further out of China’s orbit? Undoubtedly, the path to accession of the TPP remains a tenuous one as a result of China’s continued influence over the matter.
The second arrow of trade policy will undoubtedly be that of recalibration towards ASEAN through its ‘Go South’ Policy. That is good news for the region as a whole. However, China would surely fret at the prospect of it losing its status as Taiwan’s top export destination as Taiwan seeks to disentangle itself economically from China. This is where Dr Tsai must adroitly negotiate a means to reassure China that it can maintain the status quo in the Taiwan straits and at the same time, cultivate strong economic and political ties with ASEAN. The DPP has got off to a good start here by reassuring China that the ‘Go South’ policy would complement the ‘Go West’ trade policy with China.
Lastly, the DPP has, throughout the election campaign, failed to come up with a suitably coherent and sound economic blueprint to ameliorate the host of problems plaguing the Taiwanese economy, despite rallying popular support through tapping on the disenchantment of the electorate with KMT incompetence. It should seek to do so soon to assure investors and the people alike.
In a region dominated by Confucianism and paternalism, Dr Tsai’s landmark election is worth celebrating. After the party, however begins the real work of dealing with the twin headaches of domestic problems and China. Then again, we can all remain upbeat and rest in the knowledge that just as Europe has had its Angela Merkels and Margaret Thatchers, Asia will herald in a new dawn with the election of a progressive, liberal democrat with a streak for moderation, tenacity and technocratic expertise. She is a living testament that Asian women too, can break the glass ceiling.