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China awaits the outcome of Taiwan’s election

On Saturday 13 January, Taiwan holds an election to decide who will be the next president and vice president. Beijing will be looking at the outcome with extreme interest.

| 6 min read

The winning pair – on a joint ticket – will be chosen by the first-past-the-post method. Since the election of the first directly-elected president in 1996 there have been four wins by the Democratic Progressive Party (DPP) and three by Kuomintang. In all but one case the winner gained more than 50% of the vote. In 2000, the winner secured 39.3%.

The incumbent president, Tsai Ing-Wen, must retire having completed two terms. Her successor for the DPP is Lai Ching-Te, who currently leads the polls over the Kuomintang with a margin of between a very narrow 3% and a wider 11%. The DPP has lost support in this latest term of government and may not hold its current majority in the 113-seat legislature. Today, it has 62 seats where 57 is a bare majority. It looks likely the DPP will continue to hold the presidency unless there is a reversal of recent opinion polls in their favour in the last week of the election run up. The legislature is elected by a mixture of first-past-the-post single member seats with a minority of top-up seats elected in other ways.

Beijing watches keenly

The election is of great interest to mainland China. The DPP is keenest to retain as much independence from the People’s Republic across the Straits as possible. The Koumintang and the Taiwanese Peoples party are more sympathetic to mainland China. None are, however, proposing accepting full Chinese control. The Kuomintang party is the descendant of the party of Chiang Kai Shek, who led over one million Chinese to the island to continue the civil war he had lost against the communists on the mainland in 1949.

Taiwan was under Japanese colonial control from 1895 until 1945. After the war, Japan agreed to give up its power over the island and many new settlers came from mainland China. Taiwan evolved separate government structures from the mainland, with major democratic reforms in the 1990s establishing the current national and local government system with competing parties and elections. The tensions between the People’s Republic on the mainland and the Republic of China on Taiwan have continued.

In his new year address, Chinese President Xi Jinping reaffirmed his position. He stated that “China will surely be reunified, and all Chinese on both sides of the Taiwan Strait should be bound by a common sense of purpose and share in the glory of the rejuvenation of the Chinese nation”. This was mild by his standards and may reflect the wish to avoid unduly menacing threats ahead of the election in Taiwan.

Nonetheless, there has been briefing from China that Taiwanese people need to vote the right way, which means not voting for the DPP. The rest of Mr Xi’s speech was promoting world peace and stability. To president Xi and the Chinese communists bringing Taiwan fully into the fold, as they have done with Hong Kong and Macao, is unfinished business. So far, he has accepted that there is no easy military option. Trying to invade over 100 miles of well defended water against a hostile population you want to govern would be a bad idea. Whilst the Kuomintang want closer ties with China, it is aware that many Taiwanese people have seen what has happened to Hong Kong’s democracy and do not want to travel that road.

The shadow of Chairman Mao

President XI is deeply versed in Chinese history. He will be aware of Mao’s writings when he urged Chiang Kai Shek to join the patriotic Chinese anti-Japan coalition. He will know the damage the Chinese civil war did. He will also probably buy into the Mao view that the Communists needed to struggle against the Chinese landlord classes and the foreign imperialists. His adoption of a Mao suit at the 100th birthday event for the communist party showed how he was happy to assume this mantle. Mao’s thought was based on the idea of contradictions leading to struggles which they think results in a better outcome eventually. The Kuomintang, which began amongst revolutionaries came to be seen by the Communists as a reactionary bloc of landlords and bourgeoisie.

This complex background is unlikely to mean an early invasion of Taiwan after all these years of its divergence. President Xi’s address made clear he wishes to press on with peaceful development of the Chinese economy. He will be influenced by Marxism-Leninism ideas that production has a social character and private ownership can lead to capitalist exploitation.

President XI’s main economic statement was his intention to “consolidate and strengthen the momentum of economic recovery.

In a recent speech, the governor of the People’s Bank of China made it clear that China was not aiming to get back to 8-10% annual GDP growth based on massive investment in property and infrastructure. It wants a more equal distribution of wealth and income after an era of property excesses. It wants Mr Xi’s new model of pursuing high-quality development. This means more emphasis on technology, green investments and smart working.

The central bank itself, eschewing quantitative easing and bond buying, is offering some direct lending to businesses that pursue the economic objectives of green and technology-led growth. This lending now amounts to 15% of the central bank’s balance sheet. Nationalised businesses carry through much of the overall economic strategy.

President XI’s main economic statement was his intention to “consolidate and strengthen the momentum of economic recovery”. China looks to be settling for 5% growth as a more normal ambition, with extra government intervention. It wants to make more incremental progress as they expand the range of the renminbi in world trade and finance, seek to embellish a much-changed Hong Kong as a regional financial centre, and above all develop China’s technology independently from the West. China probably wants to be more powerful with better technology and weaponry before asserting itself more forcefully.

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China awaits the outcome of Taiwan’s election

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