Category Archives: Taiwan

Jan 2016

China’s stick and carrot approach toward Taiwan

Taiwan will hold presidential and legislative elections on 16 January 2016. Opinion polls show the Democratic Progressive Party (DPP) is set to defeat the country’s ruling party, the Kuomintang (KMT). Beijing has been following developments in Taiwan closely. It is concerned that a victory for the DPP candidate, party chairwoman Tsai Ing-wen, could put cross-strait relations back in a confrontational stance.

In recent months, China has adopted a carrot and stick approach toward Taiwan. On the one hand, Chinese President Xi Jinping met Taiwan’s President Ma Ying-jeou at a historic summit in Singapore on November 7, hoping to boost the KMT’s chances. On the other hand, China’s People’s Liberation Army (PLA) has intensified its military drills targeted at Taiwan, simulating an invasion of the island and sending a powerful message to the pro-independence DPP.

Chinese President Xi Jinping and Taiwan’s President Ma Ying-jeou met at a historic summit in Singapore on 7 November 2015.

Chinese President Xi Jinping and Taiwan’s President Ma Ying-jeou met at a historic summit in Singapore on 7 November 2015.

Ms. Tsai retains a big lead ahead of the elections, despite the much-heralded Ma-Xi summit. An opinion poll by Taiwan’s Cross-Strait Policy Association released one day after the meeting showed Ms. Tsai held a lead over the KMT presidential candidate Eric Chu of 48.6 percent to 21.4 percent – virtually unchanged from a poll a month earlier.

The Ma-Xi meeting was the first opportunity for the two sides to consult as equals since Taiwan split with mainland China in 1949. While Ms. Tsai did not oppose the meeting, she criticized President Ma for not defending Taiwan’s position strongly enough. A significant portion of the Taiwanese public share her view. The Ma-Xi summit therefore does not seem to have benefited the KMT in any significant way. However, the meeting re-emphasized cross-strait ties as an election issue.

Beijing has clearly put its weight behind the KMT, while the Chinese army is preparing for a DPP victory. In an editorial published after the Ma-Xi summit, the Global Times wrote that “if Tsai takes office, her ‘Taiwan Independence’ policy will be responded to by powerful countermoves from the mainland, including military force.”

According to a report from Taiwan’s Ministry of National Defense (MND), senior leaders in Beijing have met to reevaluate China’s cross-strait policies. Due to Beijing’s concerns over the outcome of the upcoming elections, the Chinese army has conducted a series of military drills simulating an invasion of Taiwan, the report found. In 2005 China passed the “Anti-Secession Law,” which made it clear that Beijing would use “non-peaceful means” if Taiwan moves toward declaring independence. The law also allows for the use of force against Taiwan if “possibilities for a peaceful re-unification should be completely exhausted.”

The MND said that, under the worst scenario, the mainland would first attempt to intimidate Taipei with a combination of military threats and a blockade. Thereafter, it could use some of the 1,500 missiles that the PLA’s Second Artillery Corps has deployed against Taiwan on political and military targets. The PLA would then mount an invasion using aircraft and amphibious vehicles. All this comes as Beijing militarizes various reefs and islands in the South China Sea. China can make use of troops, artillery, radar and communication equipment and an airstrip in the area in the case of hostilities with Taiwan. It will be able to patrol the waters surrounding the island, monitor its activities and enforce any eventual blockade.

Hopefully, nothing of the above will occur and the two sides will be able to devise a positive course of action after Taiwan’s presidential and legislative elections on 16 January 2016, continuing to improve their bilateral relations as during the period of KMT rule under former President Ma Ying-jeou (2008-2016). Yet, companies with business interests in the area would be advised to closely monitor the development of cross-strait ties since the worsening of political relations between the mainland and the island could have an impact on their operations and profits.

An earlier version of this article was published in World Review

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.