Monthly Archives: June 2015

Jun 2015

Beware of Taiwan’s evolving political dynamics

Taiwan’s political landscape is undergoing profound changes which are likely to have an impact on cross-strait relations in the years to come. Taiwan’s ruling party, the Kuomintang (KMT), suffered one of its worst electoral defeats when the Taiwanese elected more than 11,000 mayors, councillors and town chiefs in November 2014. The elections saw the KMT even lose the capital city Taipei which it had controlled for 16 consecutive years. The results are a huge political blow to Taiwan’s President Ma Ying-jeou. The winner is the Democratic Progressive Party (DPP) whose gains surprised many observers. DPP mayoral candidates won 13 of Taiwan’s 22 counties and major cities, up from a previous six. DPP mayors now govern more than 60 per cent of Taiwan’s 23 million people and are poised to win the presidential elections scheduled for January 2016.

Taiwan’s opposition leader Tsai Ing-wen spent 12 days the United States from May 29 to June 9, 2015 with a two-fold goal: win Washington’s support for her presidential bid in 2016 and reassure US officials about the intentions of her party vis-à-vis cross-strait relations. It is worth reminding that the DPP controlled the presidency from 2000 until 2008, when President Ma took over amid widespread dissatisfaction with corruption in the DPP and its tense relations with China.

Dr. Tsai Ing-wen,  Chairperson of the Democratic Progressive Party (DPP). Source:

Dr. Tsai Ing-wen, Chairperson of the Democratic Progressive Party (DPP). Source:

Tsai Ing-wen had a series of meetings with government officials, academics and overseas Taiwanese. She saw the administration of US President Barack Obama on June 2. The US is following the political dynamics in Taiwan closely after the DPP’s best election results in history in November 2014.

The resounding defeat of current Taiwanese President Ma Ying-Jeou’s party was the result of both domestic factors – such as an unequal distribution of wealth, sluggish government reform, the KMT’s perceived coolness towards youth and civil movements – and the way President Ma is dealing with cross-strait relations. There is widespread belief, prevalent among Taiwanese youth, that only Taiwan’s business elite is reaping the economic rewards of closer ties with China. President Ma has signed 21 agreements with China so far, including a ground-breaking free-trade pact – the Economic Cooperation Framework Agreement (ECFA) – in 2010.

Taiwan’s youth was at the forefront of an occupation of the legislature during the ‘Sunflower Movement’ of March and April 2014. Thousands of mostly young people protested about the Cross-Strait Service Trade Agreement (CSSTA), which, if passed, would open much of Taiwan’s service sector to investment from mainland China. Protesters claimed that the KMT had pushed the CSSTA through the legislature without following proper democratic procedures. They feared the agreement would harm Taiwan’s economy and give China too much leverage.

The DDP prefers to maintain a comfortable distance from being integrated with China, but it also has to find a way to achieve economic growth. The mainland is Taiwan’s most important economic partner by far, while the US remains the ultimate guarantor of its security. These dynamics need to be carefully considered when doing business in Taiwan.