[VIEW] Taiwan's political tsunami: It's the economy, stupid!

Tsai Tung-Chieh.

By Tsai Tung-Chieh

In the local elections held last weekend, Taiwan's voters delivered an unimaginably crushing blow to President Tsai Ing-Wen and her ruling party.

The Democratic Progressive Party (DPP) lost mayoral elections in some key cities to the Kuomintang (KMT.) Before the election, the DPP controlled 13 of Taiwan's 22 cities and counties, but now it is left with only six. More crucially, the DPP lost in Kaohsiung and Taichung, the second and third-largest cities of Taiwan. Kaohsiung had been a DPP stronghold for over two decades.

Many people focus on the implications of this result for its prospect of both cross-strait and Sino-U.S. relations. Since Taiwan's democratization in the early 1990s, cross-strait relations between Taiwan and mainland China have become increasingly unstable due to the Taiwan self-identity push by the DPP, which is at odds with China's long-standing principle that there is only one China and Taiwan is part of China. The DPP is a pro-independence party formed at the end of the martial law period in the 1980s. Before that, Taiwan was ruled by the KMT, which took control of the island at the end of World War II.

Though it once lost control of Taiwan in 2000-08, when the KMT returned, President Ma Ying-Jeou tried to repair cross-strait relations and pushed the Economic Cooperation Framework Agreement with China in 2010. However, due to worries about the hollowing-out of Taiwan's economy, Ma's policy, which was seen as a handover of Taiwan's economic strength to China, sparked the 2014 protests that became known as the Sunflower Student Movement. Months later, the KMT lost the midterm elections and both the presidency and the legislature in 2016 to an opposition party for the first time in its history.

However, after the 2016 election, President Tsai Ing-Wen refused to accept the so-called "1992 Consensus" and the "One China Principle" according to the DPP's long-standing ideology that Taiwan is not part of China. As a response and maybe as punishment, Beijing vastly reduced the number of Chinese tourists to Taiwan, seriously harming the latter's travel industry.

At the same time, China has stepped up military pressure by regularly flying jet fighters and bombers around the island, making the Taiwanese uneasy. More importantly, the resurfacing of tension with Beijing quickly undermined the legitimacy of Tsai's administration. Since the beginning of 2018, public opinion polls have regularly showed that her approval rating hovered below 30 percent. After this huge defeat, many commentators are convinced that it will be very difficult for the DPP to win the 2020 presidential election. Even Tsai perhaps may not be the candidate.

Nonetheless, searching for more peaceful or stable cross-strait relations may not be the main cause of the DPP's defeat. The KMT is hopeful it can gain an edge due to dissatisfaction with Tsai's unpopular pension reforms and especially the stagnant economy.

In November 2016, in a special preview edition for 2017 published by The Economist, Tsai, who had just become president, said she and her administration "want to make Taiwan an Asian tiger once again" during "a time of vast economic and political challenges." She described how the "bright light in a sea of darkness," which Taiwan used to be, had "dimmed amid an uncertain global environment." And her plan for 2017 was to renew Taiwan's role as a pioneer, "preserving our basic social safety net while revitalizing the economy with a new development model."

However, due to Taiwan's economic dependency on China, since the DPP came to power, the relationship with China has significantly deteriorated and has had a negative impact on Taiwan. Though the DPP hopes its success in building links with its Southeast Asian neighbors, a revitalization of connections with the United States and its ability to staunch the bleeding of Taiwan's economy will allow it to maintain power, the answer is negative. Obviously, many voters believe Tsai hasn't done enough to lift the economy, especially when Taiwan's economy is expected to slow over the next six months in the wake of volatility in global equity markets and the impact of escalating trade tensions between the U.S. and China.

In summary, while the vote was largely focused on economic concerns rather than the long-simmering issue of Taiwan's political status, the DPP lost its power naturally and China will come out potentially. Of course, it's absolutely not the end of the story.

Tsai Tung-Chieh, is a Professor at the Graduate Institute of International Politics and Dean of College of Law and Politics at National Chung-Hsing University in Taiwan.

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