A State of Ambiguity
Chatham House briefing
Published 12 April 2019
Updated 17 December 2020
ISBN: 978 1 78413 321 4
This briefing considers heightened tensions in the region and the Trump administration’s more forceful China Policy in the context of recent developments within Taiwan’s domestic politics, the current status of its relationship with the US and China, and its efforts to increase its presence in the international community.
It was expected that the governing Democratic Progressive Party (DPP)3 would see some losses in the November 2018 local elections, particularly considering the slump in President Tsai’s approval ratings in the months beforehand.4 However, the results were worse than expected. Of the island’s 22 jurisdictions, the DPP was left with control of just six cities and counties (down from 13), with the opposition Kuomintang (KMT)5 taking or retaining control of 15. Of the six special municipalities, the DPP retained seats only in the cities of Tainan and Taoyuan, with the KMT taking New Taipei, Taichung and, most surprisingly, the traditional DPP stronghold of Kaohsiung (see Table 1). In tandem with voting in the local elections, ballots were also cast on 10 referendum questions.6 Voters rejected several of the more ‘progressive’ proposed measures, including the legalization of same-sex marriage.7
While Taiwan has seen the emergence of several new political parties in the wake of the Sunflower Movement in 2014, including the New Power Party and a number of other smaller parties collectively referred to as the ‘Third Force’,8 this has not had a significant direct impact on domestic politics. Even though these parties have seen increased representation (for example, in terms of representation on city councils9), the DPP and the KMT still have the resources to maintain the strongest support and thus remain dominant. Nevertheless, these new smaller actors certainly make life more difficult for both main players. Their main success has been in focusing on, and raising the profile of, specific issues, from pension rights to marriage reform.
What is clear is that Taiwan’s politicians now need to speak to a far more diverse and often divided polity. There are various reasons for this. Increased support for the KMT should not be perceived as support for closer relations – or reunification – with China. The most overtly pro-unification party, People First, despite high expenditure, won just 0.4 per cent of the overall vote at the 2018 local elections, taking eight council seats out of 912.10 In this area at least – the one that most matters to Beijing – there is overwhelming consensus on opposition to reunification. But the significance of relations with China should not be discounted either. While this may make itself apparent in different ways now compared with at other recent elections, it undoubtedly remains a factor – as seen through public responses to Tsai’s handling of cross-Strait issues. The other major contributing factor, economic issues, is discussed below.
One immediate political consequence of the DPP’s poor performance in the 2018 local elections was the resignation of President Tsai as party chair. Despite this, it is almost certain that she will seek re-election in 2020 as the candidate of the DPP – although in March 2019 her former premier Lai Ching-te, known for his strongly pro-independence position, announced his intention to challenge her for the party’s nomination.11 Assuming she does stand again in 2020, Tsai’s chances of success will depend in part on how she responds to the complex messages emerging from the 2018 elections – as outlined above – and in part on the strength of any challengers from the opposition. So far, the KMT has failed to present a credible opponent, despite a declaration of intent from its 2016 candidate, Eric Chu. While a number of KMT candidates performed strongly in the 2018 local elections – among them Han Kuo-yu, who unseated the DPP in Kaohsiung, the KMT still has a long road to travel before it can stand a realistic chance of its chosen candidate being elected in 2020. However, Han’s message of a new economic policy may resonate strongly with voters if they see little improvement in their living standards and sense of prosperity.
Alongside the local elections in 2018, a number of referendum questions were put to voters. The rejection (by 52.3 per cent of voters) of a proposal12 that the country should apply to compete at international sporting events, including the 2020 Olympics, under the name ‘Taiwan’, rather than as ‘Chinese Taipei’, may suggest a general shift in the population away from an assertively ‘Taiwanese’ identity towards a more placatory tone towards China.13 There is also the question of how far the 2018 results are the product of widely reported incidences of ‘sharp power’ tactics deployed by China against the DPP in advance of the polls.14
What is indisputable is that the role of identity in Taiwan politics has become more complex in the last decade, meaning that politicians have no easy answers on possible responses to public concerns over issues such as cross-Strait relations. Data in recent years have shown that around 60 per cent of the population regard themselves as Taiwanese, as against 34 per cent calling themselves ‘Chinese Taiwanese’ and just 3 per cent solely ‘Chinese’. But it seems that most are happy both to recognize their ethnic and cultural Chinese identity, and to maintain the current political status quo.15 The question is whether the wider world will allow that.
Taiwan’s economy grew by 3.1 per cent in 2017, up from 1.5 per cent in 2016, and by a provisional 2.6 per cent in 2018
Domestic concerns have only complicated the issue. Stagnating wages and high youth unemployment remain key sticking points. Despite several rises in the minimum wage from 2016 onwards and pledges to increase the availability of social housing,16 there is continuing dissatisfaction with economic policy. This was evident in the backlash against the KMT from 2012, which helped to get Tsai elected, and it is clear that the remedies implemented under her presidency in 2017–18 have not been wholly successful.
Taiwan’s economy grew by 3.1 per cent in 2017, up from 1.5 per cent in 2016, and by a provisional 2.6 per cent in 2018.17 Despite the improvement particularly in 2017, President Tsai’s approval ratings dropped,18 reflecting the public’s dissatisfaction with the implementation of a number of tough reforms during her first two years in office. These included significant reductions to civil service pension payouts; reductions in preferential interest rates on savings, from 18 per cent to 9 per cent (with further phased reductions intended from 2021); and an increase in the minimum retirement age.19 These reforms were in line with a necessary adjustment to the government balance sheet, and they needed to be undertaken while the new administration had the political capital and momentum at the start of its period in power. But for the DPP, the reforms have brought a clear political backlash. It is hard enough, in any case, to undertake structural reforms like this. But the challenges are multiplied when combined with the ever-present issue of cross-Strait tensions, married with Taiwan’s economic dependence on China. The question now is how Tsai will interpret and then respond to the 2018 elections, and how receptive the public will turn out to be.
