Taiwan’s ‘Tsainami’: What’s Next?

The election of Tsai Ing-wen raises questions about Taipei's political trajectory. 

With promises to build a new era of politics and protect sovereignty, the island nation of Taiwan elected the first female president, Tsai Ing-wen, in the Chinese-speaking world on Saturday. The historical day was, however, heavily censored and rhetoric watered down by official outlets in mainland China. China’s Twitter, Weibo, censored searches for “Tsai Ing-wen” as well as for “Taiwan”; state-run media outlets referenced the “leadership” and legislative elections, but largely focused their coverage on President Xi’s opening speech at the Asian Infrastructure Investment Bank (AIIB) instead. But, whether in mainland China or elsewhere in the world, to ignore the democratic victory of Tsai and the Democratic Progressive Party (DPP) in Taiwan would be a mistake. Tsai’s electoral landslide has tremendous implications for both the trajectory of cross-strait relations, as well as the region more broadly.

The foundations for political change and Tsai’s election took root over the last several years, yielding a Tsai victory with 56 percent of total ballots cast and 68 of 113 seats in the island’s parliament, the Legislative Yuan (LY). Tsai won additional allies in the LY by embracing “third force” parties, suggesting an administration that will look to lead a government of political inclusiveness. The landslide electoral victory marks an important responsibility the new Tsai administration will face: domestic constituents are putting their hope in the government to secure the island’s future prosperity and stability. As the election results reveal, the last eight years under Chinese Nationalist Party (KMT) president Ma Ying-jeou have fostered discontent among many Taiwanese. Rapprochement with mainland China has not yielded the economic benefits promised; Taiwan has little more international breathing space than it did in 2008. The task ahead for Tsai thus entails both shepherding domestic political and economic change while balancing ties to mainland China, the United States, and Taiwan’s role on the global stage.

A top policy priority for Tsai and her team will likely be a comprehensive self-strengthening. Bolstering Taiwan’s capacities can (and should) entail many different realms, ranging from socio-economic to the Taiwanese armed forces. But to remain loyal to her domestic constituents, and to create a future based upon the will of the Taiwanese people as Tsai has repeatedly stated, she must begin first with the island’s economy. The island’s GDP growth rate dropped from 3.74 percent in 2014 to a meager 1 percent at the end of 2015. Wages are stagnant, property prices are soaring, and state pensions consume about 7 percent of the government’s total budget. In addition to the challenges of boosting economic growth and increasing the competitiveness of Taiwanese industries, the Tsai administration will have to consider hefty reforms prerequisite to any consideration of joining the U.S.-led Trans-Pacific Partnership (TPP). Unlike Ma’s economic policies that have linked the island’s economy to mainland China through noteworthy trade deals, Tsai will likely tackle domestic concern of economic vulnerability by distancing the island’s economy from the mainland. Big-ticket items such as the cross-Strait services trade agreement and future Chinese investment in Taiwanese microchip manufacturers may well be put on pause.