Features Taiwan Election

Competing growth strategies for Taiwan as Tsai leads in election poll

07, Jan. 2020

Democratic Progressive Party’s presidential candidate Tsai Ing-wen (R) chooses vice president candidate William Lai as her running partner (File photo courtesy of CNA).
Democratic Progressive Party’s presidential candidate Tsai Ing-wen (R) chooses vice president candidate William Lai as her running partner (File photo courtesy of CNA).

By Gloria Chou, Celine Chen

TAIPEI, NNA – Taiwan's first woman leader Tsai Ing-wen, who is seeking another four-year tenure, has steadily gained the lead in the presidential race, bolstered by a stronger economy and fears of China's control amid cross-strait tensions and unrest in Hong Kong.

Tsai and her pro-independence Democratic Progressive Party (DPP), which came to power in 2016, are leading with a comfortable 48.6 percent endorsement by pollsters, way ahead of China-friendly rival Han Kuo-yu of Kuomintang (KMT) who trailed at 15.4 percent, according to the latest poll by popular Apple Daily newspaper.

The run-up to the presidential and legislature elections, which will be held on Jan. 11, has been fraught with spats over allegations of China's threatening reunification rhetoric, interference with the polls and Taiwan media as well as espionage.

While support for Tsai had waned since taking office, culminating with a devastating defeat of her party in local mayoral elections in November 2018, she managed to make up lost ground last year.

Her popularity rose in early 2019 after she shot down Chinese President Xi Jinping's call for reunification under the "one country, two systems" framework that China applies on Hong Kong where the widespread crackdown on violent democracy protests has rippled through self-ruled Taiwan.

Nationalist sentiments grew especially among young Taiwanese, many of whom will be first-time voters, after China froze official communication with Taiwan, increased military activity near Taiwan territory and successfully persuaded a number of countries to stop recognizing the sovereign status of Taiwan.

In her recent New Year's Day speech, incumbent Tsai reiterated her defiant stance: "Democracy and authoritarianism cannot coexist within the same country. Hong Kong people have shown us that 'one country, two systems' is absolutely not viable."

In the hurly burly of any hustings, disinformation, mud-slinging and populist rhetoric could sometimes overshadow the less sensational aspects of manifesto policies of rival parties.

Here, NNA speaks to DPP and KMT representatives to seek clarity on their positions on issues that matter to Taiwan's economic prosperity and what they hope to achieve should they win the elections.

Growing Taiwan economy, differing views on China business ties

Taiwan's export-reliant economy grew stronger than expected last year. It achieved a third-quarter GDP growth of 2.91 percent from a year ago, bucking the sluggish trend afflicting Singapore and South Korea as global markets slumped in trade tensions.

This could bode well for Tsai at the voting box as economic woes was a factor when the ruling party suffered defeat at most of the city and county elections in 2018.

Taiwan has proven to be resilient in the face of Chinese economic pressure and even in the fallout from U.S.-China trade dispute.

While the island is a dynamic capitalist economy, it relies heavily on economic ties with China as many Taiwanese businesses have been operating on the mainland for a few decades.

The return of Taiwanese production from China, upswing in electronics such as new smartphone models before Christmas and foreign visitor arrivals had given the gross domestic product a much needed boost in Q3.

Taking advantage of government incentives, many homegrown companies had moved back to Taiwan because of rising costs in China in recent years even before the worsening U.S.-China trade dispute. More companies followed suit last year to avoid the steep U.S. tariffs on Chinese imports.

In her bid for re-election, Tsai seeks to be less reliant on China in her broad economic policy as her party has become more distrustful of the communist giant's odd carrot-and-stick approach in its dealings with the island, which is seen as their breakaway province that "must be united with the mainland by force if necessary".

However, Tsai's DPP still insists on maintaining peaceful ties with China while trumpeting an independence campaign.

But rival KMT has blamed the ruling party for incurring the wrath of China and causing the collapse in diplomatic ties.

Pointing the finger at DPP's aggressive policy toward its giant neighbor, Han Kuo-yu's campaign general policy convener Woody T.J. Duh told NNA that KMT would strive to regain friendship with China if it wins the elections.

“Basically, we will seek to maintain peace with China under the premise of safeguarding Taiwan’s sovereignty, and then further enhance economic cooperation with China,” said Duh in explaining his party's middle-ground position.

KMT, which ruled Taiwan for the most part since the middle of the last century, had subsequently cultivated friendly ties across the strait through commerce and tourism while keeping its self-governing status intact.

KMT keen on regional trade pacts, more China links

High on the list of KMT priorities if it were to take back the reins is joining regional trade pacts such as the Regional Comprehensive Economic Partnership (RCEP) which members hope to finalize this year.

The pact involving the 10-member ASEAN bloc, China, Japan, South Korea, Australia and New Zealand aims to break down trade barriers and promote investment to help boost emerging economies.

Noting that China has become the world's second largest economy, Duh said: “It’s not possible for neighboring countries to disregard the position China has held if we wish to form economic ties with them.”

However, Tsai’s campaign office spokesman Liao Tai-hsiang rejected KMT's accusation that her administration was responsible for souring ties with China.

KMT’s presidential candidate Han Kuo-yu (L) and his running mate, vice president candidate Chang San-cheng, at an election campaign in Taichung on Dec. 29 (Photo courtesy of CNA).
KMT’s presidential candidate Han Kuo-yu (L) and his running mate, vice president candidate Chang San-cheng, at an election campaign in Taichung on Dec. 29 (Photo courtesy of CNA).

“Maintaining good interaction with China has always been our principle,” Liao told NNA in an interview.

“We encourage interactions between the two sides, but it depends on whether China is willing to be open as it sometimes shut the door, be it investment or tourism,” he added.

The distrust continues even after China offered a slew of measures to open its market wider to Taiwanese investors in November in a series of gestures that include television appeals to "come home". It also offers equal treatment to Taiwanese living and studying in China such as buying a house, school enrollment and career evaluation.

However, China's overture was immediately rebuffed by the DPP while KMT took a cautious stand of welcoming the better treatment but added that any Chinese actions to belittle Taiwan sovereignty "must be firmly opposed".

The 26 new initiatives are on top of the 31 measures proposed in 2018 to encourage economic and people-to-people exchanges under the Cross-Straits Economic Cooperation Framework Agreement (ECFA) which had benefitted Taiwan for the past 10 years, according to Beijing-based Research Center of Cross-Straits Relations.

But DPP had refused to ink new agreements when it came to power, accusing China of dangling them as tactics to sway Taiwan voters.

Trading more with Japan and beyond

Another significant regional pact that KMT is keen for Taiwan to join is the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Signed in 2018, it is a Free Trade Agreement between 11 countries committed to trade liberalization and rules-based trading amid current trade tensions and anti-globalization sentiments. They include Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

As Taiwan needs Japanese support to join this FTA, Duh feels that the country has to lift the ban on food imports from areas affected by the Fukushima nuclear disaster.

“I believe the Taiwanese people would likely revoke their referendum decision if Japan is able to provide official documents after certifying the food is safe for consumption,” said Duh.

DPP, on the other hand, hopes to study the issue deeper by ensuring that regulations and inspection would be stringent while obtaining feedback from people, said Liao.

KMT’s ‘common people’ policy versus DPP’s industry upgrade

On home ground, KMT’s Han plans to allocate 100 billion New Taiwan dollars ($3.3 billion) as subsidies to help small traders and small-and-medium enterprises such as vendors and those operating in night markets, said Duh who blamed DPP’s tilted policies for ignoring “the common man", a term often cited by Han when highlighting the plight of ordinary folks during the campaign.

To help enterprises, Han also proposed that talks on the stalled ECFA be resumed to allow the setting up of free trade zones near harbors and airports on both sides.

On the other hand, Tsai's administration wants to take Taiwan to a higher plane with its “5 plus 2” industrial innovation plan that seeks transformation and upgrades of key sectors such as national defens, biotechnology and new energy.

Taiwan should focus on quality improvement to bring standards on par with that of advanced industrial countries like Japan and Germany while expanding its target markets in the world instead of relying too much on China, said Liao.

The administration had already made moves to attract more investments and visitors from Southeast Asia.

Other DPP goals include developing Taiwan as a center for advanced production, research and development as well as a capital dispatch and advanced asset management center in Asia, according to Tsai’s re-election manifesto.

KMT wants continued use of nuclear power

The push for further developments and the need to sustain industrial operations in Taiwan have raised the issue of energy supply. Concerns of power shortages and air pollution as a result of ever-increasing power consumption have become hot topics too.

In the debate on using more nuclear energy to ensure a reliable and cheaper supply to the country, KMT reminded the ruling party that it is obliged to resume the operation of three power plants after 59 percent of voters supported the continued use of nuclear power in a referendum in 2018.

“No lack in electricity, acceptable price and fairly-good air quality,” said Duh as he highlighted key points in KMT’s energy policy to address public and industry concerns.

Taiwan has four operable nuclear power plants, which account for around 15 percent of the island's electricity generation, according to the World Nuclear Association. But the DPP's policy is to phase out nuclear power by 2025 and use more renewable sources.

“We don’t think DPP will be able to retire all nuclear reactors and increase renewable energy to 20 percent of power supply as an alternative by the 2025 deadline,” Duh said.

However, Liao reiterated that DPP is committed to develop a cleaner energy supply structure with renewable sources. “We will continue to develop new sources of supply and carefully maintain the supply-demand balance in future,” he said.

According to 2018 Taiwan Power Co. statistics, coal and liquefied natural gas each accounted for 39 percent of energy generation, in comparison to 11 percent for nuclear power and 5 percent for renewable sources, while the rest came from oil and hydro power.

Fighting China meddling with new law

Obviously bent on staying in power, the DPP government scrambled to pass a sweeping law on the eve of the new year to block political interference following accusations that China had been backing candidates from the main opposition party with funds and mobilizing support with disinformation on social media.

Those found guilty will be jailed up to five years or fined up to NT$ 10 million.

KMT has cried foul, criticizing it as a political tool to win votes and a threat to democracy.

China has repeatedly denied any interference in Taiwan affairs and reiterated its opposition to the legislation, saying the DPP was trying to "blatantly reverse over" democracy and increase enmity.

A spokesperson for Beijing's State Council Taiwan Affairs Office, told reporters in December: "We have noticed the ruling DPP has amended laws to reach political goals and to restrict the ordinary (cross-strait) exchanges... The DPP's move is just to punish and to horrify Taiwanese people who participate in cross-strait interactions."

In her new year speech, Tsai said the new law would strongly protect Taiwan's democracy and freedom but would not affect any regular cross-strait exchanges or interactions.

Meanwhile, as parties make their final battles to woo the hearts and minds of voters, Tsai's exhortation to defend Taiwan sovereignty continues to reverberate throughout the island.

To China, Taiwan would always be seen as its rightful territory regardless of who wins the election.