Taiwan President Tsai Ing-wen’s Strong Headwinds
By John F. Copper

Taiwan President Tsai Ing-wen’s Strong Headwinds

Jul. 22, 2016  |     |  0 comments

Earlier this year, on January 16 to be precise, the chairwoman of the then opposition Democratic Progressive Party (DPP) — and also its presidential candidate — Tsai Ing-wen, won a momentous election victory in Taiwan. She prevailed easily over her Nationalist Party (KMT) contender and another candidate — getting more votes than the two combined. At the same time, her party grabbed a majority in the legislative body of government — for the first time ever.

Most observers perceived President Tsai had acquired a virtually unchallengeable mandate to govern and would do so with ease and with purpose. Furthermore, Taiwan would change for the better. Her supporters’ celebrations after the election were electric. Most observers judged the event as historic, and that the impact would be far-reaching. It was clearly not an ordinary time.

But soon reality set in as pundits came to perceive that President Tsai faced full-sized difficulties. In fact, to some observers, Tsai and her party were challenged by problems of such a scope and magnitude that the future did not look good. In other words, the headwinds seem almost insurmountable, and Tsai’s fate did not appear to be a happy one. She might not win reelection and future historians may judge her harshly.

Or might this latter judgment be premature?

Looking at the predicaments Tsai currently faces may tell the story.

First, President Tsai has a seriously troubled economy on her hands. Growth as measured by gross domestic product (GDP) is below 1 percent. Analysts talk about a recession or of one being just around the corner. The projections are for the bad economic times to continue next year. Since prosperity will be a top issue for voters in Taiwan, the situation doesn’t look promising for the DPP in the mid-term (local) elections in 2018. (A setback in 2014 signaled the KMT’s election defeat this year.)

Furthermore, according to a recent Economist Intelligence Unit report, Taiwan’s GDP expansion leading up to 2020, when Tsai will seek reelection, will be below 2 percent. Growth will lag the rest of the world and, perhaps more importantly, will trail South Korea, Hong Kong, and Singapore, the benchmarks by which Taiwan’s residents will judge President Tsai’s economic policies.

During the election campaign, Tsai pitched an “innovative economy” (as opposed to an export one that had given Taiwan healthy growth for 40 years) and the expansion of economic ties with Southeast Asia (instead of China that had been the main source of Taiwan’s growth for some time). Now her policies don’t look very promising and may need to be downplayed or supplanted by some new ones; yet economic stimulus from expanding trade with the US, Europe, or Japan does not seem likely since there is little hope for good growth in any of them.

There is still more evidence to generate pessimism. At least half of Taiwan’s richest and most dynamic business people are involved with China. They are not faring well due to an economic slowdown in China, but also owing to China’s unfriendliness over Tsai’s election victory. It is also the reason why foreign investment in Taiwan has dropped. This situation is likely to get worse.

Tsai’s second big issue is Taiwan’s political relations with China. During the campaign, Tsai won voter support coming from the prevalent and quite intense fear that China is an existential threat to Taiwan’s democracy and sovereignty. Yet China is the “elephant in the room” for virtually all of Taiwan’s neighbors and many others around the world. The only difference is that China claims Taiwan to be its territory.

Tsai will have to come to grips with the reality that she cannot avoid China (as many of her supporters and voters want) and the relationship with China will overwhelm her and her party if not handled adroitly, simply because China is so important and its foreign policy is effective and challenging.

Bringing this reality front and center is the fact that the current focus of China’s foreign policy is building all over the world, highlighted by its new Silk Road and a maritime belt to compliment it. The scope of it is gargantuan: 900 projects are now underway and projected spending will reach USD 4 trillion. (America’s post-World War II Marshall Plan that financed the recovery of Europe was something over USD 100 billion in today’s dollars.)

China’s plan is to take advantage of a period of “strategic opportunity” leading up to 2020 (coincidentally the year President Tsai will seek reelection), fulfill the “China dream” and transform the metric of world trade into a merging of the Atlantic and Asian blocs into one dominated by Beijing. Can Taiwan be left out? China has thoughts of integrating Taiwan further into its economic plans. One is building a “Chunnel” under the Taiwan Strait. Many in Tsai’s party have expressed opposition to the idea. While this project may be grandiose, China has much more to offer and Taiwan cannot wisely adopt a rejection mode.

Not sure of victory, Tsai encouraged the formation of new parties. These parties are now playing a role in Taiwan’s politics — not exactly in sync with the DPP.

Third on President Tsai’s agenda of challenges is her relationship with the United States. She handled this skillfully during the campaign and even got Washington to tentatively support her (as it had refused to do before). But looking at cycles in America’s posture towards China, anti-China sentiment in Washington is normally part of an election campaign and often spills over for a while after. But as the new administration realizes it must cultivate good relations with China to manage the global economy and deal with nuclear proliferation, global climate change, and a host of other problems, and, in short, run the world, relations will become more cordial.

Thus, during the election campaign, Taiwan was, and is now, advantaged by strained US-China relations. But this is unlikely to be so next year. America may well see Taiwan less as its protectorate or responsibility in 2017 simply because of this “reliable” trend. Furthermore, this cycle will probably be more pronounced because US-China ties have been more hostile during the latter years of the Obama administration than during any time since before Richard Nixon became president. So the wind next year coming from the United States, the prognosticators say, will not be so favorable.

A fourth matter is President Tsai’s military/strategic policy and her relationship with her defense establishment. During the campaign Tsai pledged to spend more on defense, but also to increase welfare to help the poor. She will find it hard to do both, perhaps either, due to Taiwan’s sagging economic growth. She said she wanted to allocate 3 percent to the military, but there is now hedging about this.

Tsai also has difficulties with her generals. They mostly support the KMT, and many are male chauvinists. Thus the relationship is not exactly a happy one for Taiwan’s first female president. It did not help that a Taiwan naval vessel recently fired a missile in China’s direction accidentally, upsetting the tranquility in the Taiwan Strait. Neither did Tsai’s appointments of advisors to her security team who had little or no experience on the subject of national defense.

A fifth “bucket” of concerns involves Taiwan’s third parties, civil and human rights, minorities, women’s matters, education, pensions, and more. They were all groups or issues that favored Tsai to win the election. During the campaign, Tsai and her party campaigned in opposition to the KMT’s elite governance and against its insider, exclusivist nature. Not sure of victory, she encouraged the formation of new parties. These parties are now playing a role in Taiwan’s politics — not exactly in sync with the DPP. Worse they are making special demands that do not accord with President Tsai’s agenda.

Meanwhile, the Aborigines have staged public demonstrations for better treatment. Rights organizations are in some ways more active than ever. Women complain that President Tsai’s cabinet is nearly all men. Retirees want to keep their pensions even though this is a big financial burden to the government. Some local governments want their debts forgiven. All of these demands are in the way and take money, energy and time away from serious matters.

Sixth is the matter of the KMT. The DPP smashed the KMT in the election. It now has little voice. Some even say it will never recover. But that is not likely. It has bounced back before. It has talent, money, and other resources. One reason for its election defeat was that the party was badly split before and during the campaign. This problem can be fixed. Some members said they looked forward to being in the opposition again. Others opine that the nature of Taiwan’s politics now means a frequent rotation of parties (the pendulum theory of elections) due to politicians overpromising and voters over-expecting; thus they would be back in power again soon.

President Tsai needs a loyal (at least cooperative) opposition. The KMT still can help Tsai; it can also seriously obstruct. On dealing with China, a huge problem for Tsai, she can use the KMT’s assistance. Recall that the KMT to a large degree managed relations with China during the end of the Chen administration.

Last, but certainly not least, is President Tsai’s relationship with the DPP base. In fact, one might suggest that this is at the top of the list of her stresses. Arguably it underlies, or is fundamental to, every other subject discussed here regarding her ability to lead and govern. A significant part of Tsai’s base hates China and wants to part company, even economically. Many delude themselves that the United States will protect Taiwan no matter what. Most of Tsai’s foreign supporters in Taiwan encourage Taiwan’s independence, yet they don’t have any influence with their home governments (which in almost all cases play no role anyway) and will not help Tsai in the event of China threatening the use of force.

Tsai Ing-wen won the election based on her unifying a polyglot of special interest groups, harnessing growing populism in Taiwan, and exploiting the KMT’s misfortunes and bad brand. These assets don’t apply to her successful governing. In fact, they are liabilities.

How can President Tsai govern successfully? Tsai is certainly not a fan of populism; she has said so. She is not charismatic. She is a good strategist. She has shown determination and persistence. Can she be a realist? Can she be flexible (or ruthless some would say) and turn away from those ideas and people that got her where she is, but are a hindrance now? Those latter qualities are needed for her to deal with her powerful headwinds.

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