The Implications of Taiwan’s Presidential Election for Cross-strait Stability

What is at stake in Taiwan’s forthcoming presidential election?

Some 19.5 million Taiwanese voters will head to the polls on 13 January 2024 to elect their next president, as well as 113 members of the Legislative Yuan, the highest lawmaking body on the self-ruling island. The elections come at a critical time, and the presidential contest in particular has major implications for Taiwan’s relations with China, which claims the island as part of the mainland’s territory. Tensions over the island’s future have been steadily rising, as decades-old understandings that have kept the peace across the Taiwan Strait begin to crumble under the pressure of changing dynamics in Beijing, Washington and Taipei.

Cross-strait communications have been on hold since 2016, because Beijing refuses to engage with President Tsai Ing-wen’s Democratic Progressive Party (DPP) administration, which it believes to be working toward Taiwanese independence. Meanwhile, larger trends have made it harder for the three parties to manage their differences. China has become stronger and more resolved to unify with Taiwan, pursuing an approach heavier on coercion than enticement. At the same time, the island’s population is losing any interest it may have had in becoming part of China, as a distinct Taiwanese identity and lifestyle grows. China’s threatening military manoeuvres in and around the Taiwan Strait have only cooled the public further on the mainland. As rivalry grows between the U.S. and China, both Washington and Beijing have attached higher stakes to the Taiwan issue, leading the U.S. to provide more overt military and political support to Taiwan and China to push back.

Taiwan’s next leader will play a significant role in determining how the island navigates this period of cross-strait turbulence. Having completed the two terms allowed by the Taiwanese constitution, President Tsai cannot run, which means that a leadership change is certain, regardless of which party wins. Though her eight-year presidency was marked by tension with China, with less cross-strait dialogue than ever before, Tsai has remained careful, when speaking in public, not to provoke Beijing, while also strengthening Taipei’s ties with Washington. A new president could reset this pattern.

Who are the candidates?

Taiwan is dominated by two political parties: the DPP and the Kuomintang (KMT), which have taken turns in executive office since the island’s first presidential election in 1996. The KMT, also known as the Nationalist Party of China, relocated to Taiwan in 1949 following its defeat by the communist People’s Liberation Army in the Chinese civil war. Its platform states that there is only “one China”, of which Taiwan is a part, but it also considers Taiwan – or the Republic of China – to be the legitimate representative of that “one China”. Representing Taiwan’s conservative forces, the KMT has nonetheless established close relations with the mainland over the years. The DPP, on the other hand, has its roots in a movement against authoritarian KMT regimes, which ruled from 1949 to 1987. It was founded in 1986. On the progressive end of the island’s political spectrum, it considers that Taiwan is already de facto independent, making it Beijing’s “bête noire”. The KMT and DPP are often referred to as the “blue” and “green” parties, after the colour of their respective flags.

The DPP’s presidential candidate, Lai Ching-te, has been Tsai’s vice president since 2020. Previously, he was mayor of the southern city of Tainan, from 2010 to 2017, and the island’s premier during Tsai’s first term, from 2017 to 2020 (the premier, who is appointed by the president, is formal head of the executive branch). A physician by training, Lai traces his motivation to pursue a career in politics and defend Taiwanese democracy to the 1996 Taiwan Strait crisis, when China lobbed missiles over the island in response to former Taiwanese President Lee Teng-hui’s visit to the U.S. The DPP’s vice presidential candidate, Bi-khim Hsiao, was most recently Taiwan’s de facto ambassador to the U.S. and is well known for being an outspoken, effective diplomat. DPP supporters have welcomed the partnership, pointing to complementary skill sets: Hsiao’s experience in diplomacy goes nicely with Lai’s strengths in administrative and domestic affairs. Her charisma could help attract the young voters who are expected to be a decisive element in the January election. Hsiao is also known to be a close confidant of Tsai, an important signal of party unity since Lai and Tsai were once rivals for the top post.

KMT candidate Hou You-ih is a former mayor and chief of police of New Taipei City. Well acquainted with domestic affairs and law enforcement, he has less experience in foreign policy. His deputy, Jaw Shao-kang, regarded as a wunderkind in the 1990s, is now an old hand in politics. Popular for his persuasive public speaking, he rose to a prominent position in the KMT but later left the party to set up his own. He subsequently left politics for a time after losing the Taipei City mayoral election in 1996. During his 25-year hiatus from politics, he became a media tycoon, and remained influential in the KMT’s “deep blue” conservative faction that espouses pro-China views. Jaw’s nomination came at a very last minute; the KMT had previously attempted to forge an alliance with the smaller Taiwan People’s Party (TPP) and run on a joint ticket, but the negotiations fell apart due to disagreements about which party should field the presidential candidate.

Running a distant third in the polls, TPP candidate Ko Wen-je is a former Taipei City mayor. Having first won the mayoral post as an independent but with the DPP’s blessing in 2014, he has since formed his own party. Well liked for his critical remarks about both the DPP government and the KMT, he is popular among young and other anti-establishment voters who want an alternative to the island’s two traditional political forces. His deputy, Cynthia Wu, is a one-term legislator from a wealthy family that owns the Shin Kong group, a conglomerate with holdings in finance, retail and real estate.

What are the candidates’ positions on cross-strait relations?

The issue of cross-strait relations is central to the election. Dramatically opposing narratives have emerged, with the KMT claiming that the presidential race offers a choice between “war and peace”, and accusing the DPP of being provocative toward Beijing, while the DPP says it presents a choice between “democracy and dictatorship”, alluding to the KMT’s conciliatory approach to China. Both sides are portraying themselves as trustworthy actors that will preserve peace in the Taiwan Strait, but in different ways: the KMT says it will ease tensions by talking to China, while the DPP emphasises building Taiwan’s resilience through a stronger defence, closer international alliances and a better image on the world stage.

The DPP’s Lai has vowed to preserve Tsai’s legacy by continuing her moderate policies, geared toward maintaining the status quo. Tsai has skilfully managed a traditional area of friction between the DPP and Beijing, which concerns the party’s refusal to accept the “1992 consensus”. The 1992 consensus is an informal agreement reached between mainland China and the KMT that there is only “one China”, but without defining what that phrase refers to – the People’s Republic of China or the Republic of China, as Taiwan is officially known. Tsai did not accept the 1992 consensus in substance – the DPP spurns the “one China” framing and Tsai toed this line – but she went further toward acknowledging it than her party has before, saying she respected it as a historical fact. She also stated that cross-strait affairs should be conducted in accordance with the Taiwanese constitution and the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, both of which feature the notion of “one China”. Nevertheless, Beijing rejected her overture, as it considers full acceptance of the consensus a precondition for dialogue.

Questions linger, however, about Lai’s position on the island’s future ever since he said, in 2017, that he is a “political worker who advocates for Taiwan’s independence”. He later said he was referring to Taiwan’s de facto sovereign status, not de jure independence, a position in line with the DPP’s stance. But his statement has stuck in Beijing’s craw, given that formal independence is one of the outcomes China most seeks to avoid. Since he launched his campaign, Lai has attempted to moderate his image to signal to both China and the U.S. that he wants to maintain the status quo. He says he is open to dialogue with Beijing as long as it is on an equal footing. His selection of a running mate who has managed the U.S. relationship for the last three years was likely intended to send a similar message.

On the opposing ticket, the KMT’s Hou has followed his own party’s line on cross-strait issues. He is firmly opposed to Taiwanese independence and has explicitly stated his support for the 1992 consensus. He seldom mentions the term on the campaign trail, however, as he is well aware that his opponents will use such statements to suggest that he backs China’s “one country, two systems” model, which most Taiwanese reject. The concept is all the more disfavoured because of what has happened in Hong Kong. China promised such an arrangement when the UK handed over control of that territory in 1997, but in 2020, when pro-democracy protests broke out in Hong Kong, it enacted a National Security Law that expanded its authority in the jurisdiction and cracked down hard.

Hou summarises his cross-strait strategy as pursuing “three Ds” – defence, dialogue, de-escalation – for maintaining the status quo. He has promised, if elected, to immediately resume talks with China on practical matters but at the same time vowed to continue Taiwan’s defence build-up, marking a departure from the last KMT presidency (2008-2016), when such spending was limited. Hou has, however, suggested the possibility of shortening compulsory military service to four months if the Taiwan Strait situation settles down. The Tsai administration recently extended the service requirement to a year (its original length), reversing a trend of steadily reducing the term in what was widely seen as an important gesture of seriousness about the growing threat of conflict with mainland China.

Finally, the TPP’s Ko has positioned himself as the candidate most in favour of dialogue with Beijing, frequently saying “it is better to be family than enemy” of the mainland. During his tenure as mayor of Taiwan’s capital from 2014 to 2022, he presided over the Shanghai-Taipei forum, an initiative that continued despite fraying ties with China. Because of his success in keeping the forum going even when tensions ran high, he is often lauded as a champion of cross-strait comity at the subnational level.

What other issues are the presidential candidates campaigning on?

The debate about Taiwan’s relationship with China extends to economic policy, with each of the three candidates taking a different approach. The KMT’s Hou advocates for an open door allowing more mainland Chinese to travel to and work in Taiwan. If he is elected, he says, he will resume negotiations with Beijing on the terms of Economic Cooperation Framework Agreement (ECFA), a bilateral trade pact signed in 2010, but which China is threatening to review, as well as the Cross-Strait Services and Trade Agreement, which was cancelled due to mass protests in 2014 for fear that local industry would not be able to compete with mainland China’s. For his part, Lai has stated that Taiwan should not rely on China economically, instead charting its own course. Both Hou and Lai have vowed that, if elected, they will make sure Taiwan accedes to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a twelve-member free regional trade agreement that China also plans on signing.

Other issues that have surfaced in the presidential campaign include jobs, wages, housing and inflation, which are particularly important for young and middle-class voters. With the Taiwanese population ageing, social welfare and health services have also become prominent topics. A divisive subject is food safety, with KMT criticising the DPP administration’s decision to permit the import of U.S. pork containing ractopamine (an additive that can have ill effects if consumed in large quantities). More generally, the issue of good governance is front and centre in the campaign: the opposition is highlighting the government’s failure to ensure a steady supply of electricity and consumer goods, as well as its delay in securing vaccines at the peak of the COVID-19 pandemic in 2021.

Is China trying to influence the election?

Yes, to a degree. It is no secret that Beijing prefers Hou – and to a lesser extent, Ko – as both are more amenable to Chinese conditions for dialogue than the DPP ticket. A KMT or TPP victory would allow the Chinese authorities to show their domestic audience that they are making progress in pursuing peaceful reunification, thereby decreasing the pressure on them to take a tougher posture. To underscore its preferences, China’s Taiwan Affairs Office has issued harsh statements about Lai and Hsiao, nicknaming them the “independence duo”, and repeatedly warned that a declaration of Taiwanese independence would have dire consequences. Chinese authorities have allegedly subsidised tours to China for Taiwanese grassroots leaders to sway them toward supporting pro-China candidates. Studies have also shown media manipulation aimed at delivering pro-China messages to a Taiwanese audience. (These messages include some characterising the DPP as a “troublemaker” and Taipei as a “chess piece” for Washington, as well as others sowing doubt about whether the U.S. is a reliable partner for Taiwan.) Finally, China’s recent accusations that Taipei is violating ECFA provisions by allegedly introducing trade barriers on Chinese goods, and its suspension of preferential tariffs on twelve Taiwanese products covered under ECFA, could be a portent that it will further review, suspend or cancel its commitments under the agreement if it is unhappy with the election’s outcome.

Not surprisingly, Taiwanese officials have expressed concerns about Chinese interference. Still, there appears to be an understanding on both sides of the strait that if Beijing is too heavy-handed, it will risk a backlash that could work against it with Taiwanese voters.

How is the race shaping up, and what are the potential implications for regional stability? 

The competition for the presidency will be stiff. The DPP’s Lai leads in the polls with close to 40 per cent, but he faces a formidable challenge from the opposition parties. The KMT got a boost after its flirtation with the TPP, and is now polling at over 30 per cent, while the TPP remains slightly under 20 per cent.

The KMT and TPP’s failure to form a joint ticket has given breathing space to Lai, but the outcome still looks like a close call. Candidates are racing against time to woo younger and undecided voters, many of whom are ready for a change after eight years of DPP rule, having become disillusioned with the political establishment. But they are also uneasy about the KMT’s pro-China stance. The three-way fight makes it more likely that no party will win a majority in the Legislative Yuan, which would curtail the incoming president’s power.

If the DPP wins, China will likely opt for a show of force, stepping up its military activities in the strait as well as economic and other forms of coercion. Its goals would be to deter a new DPP government from crossing its red line, namely a declaration of formal independence, and to signal to Washington that it should block actions by Taipei that Beijing would see as provocative. If the KMT or TPP wins, cross-strait tensions might ease, at least temporarily, and prospects for cross-strait dialogue would improve. In the longer term, however, the KMT or TTP might need to fend off Chinese pressures to enter more difficult discussions about Taiwan’s status, which would likely spark fierce resistance from the Taiwanese population.

Either way, it seems clear that Beijing does not seek a full-blown crisis, given the warmth at the summit between Presidents Xi Jinping and Joe Biden in November, as well as the progress in the bilateral relationship that has followed.

What can be done to prevent a post-election escalation of tensions? 

The presidential election poses obvious risks with regard to tensions in the Taiwan Strait, particularly if the DPP secures a third term and China reacts with a show of force that creates heightened risk of a misjudgement or miscalculation that escalates tension. Still, whichever of the major parties wins (the TPP has no realistic prospects), there will be an opportunity to improve cross-strait relations.

In the event of a Lai victory, as Crisis Group noted in a recent report, the DPP should quickly work to establish back channels with Beijing. The goal should be to set expectations and to identify a mutually acceptable formula for the cross-strait relationship. If, as is likely, they cannot reach consensus, Lai should fall back on Tsai’s 2016 gambit, recognising the historical fact of 1992 consensus and saying cross-strait affairs should be conducted in accordance with existing legal frameworks that govern cross-strait relations. To appeal to Beijing’s interest in demonstrating progress in cross-strait relations, the DPP could also offer a list of areas of future cooperation, such as resuming cross-strait tourism and student exchanges, as well as in law enforcement and maritime security, where China and Taiwan are still working together despite the heightened tensions of the last eight years. Actual cooperation, however, should be conditional on Beijing ratcheting down its military and economic pressure on the island.

If the KMT wins, the understandings it has with Beijing around the 1992 consensus imply that relations with China will improve, at least temporarily. Given China’s refusal to engage with the DPP administration, a change of government would be a face-saving way for it to restart cross-strait dialogue. The KMT should manage China’s expectations, clearly communicating that progress can happen only at a pace that is acceptable to Taiwanese society and seeking reciprocity in the form of smaller Chinese military deployments in the Taiwan Strait. At the same time, the KMT should reassure the U.S. of its commitment to strengthening deterrence and pursuing defence reforms, in particular by adopting the asymmetrical military strategy and military personnel reform initiated under the Tsai administration and supported by Washington.

Regardless of the election’s outcome, China would have a lot to gain by finding a working relationship with the new government. A DPP victory would mark the first time the same party secures three consecutive terms, evincing staying power that would be difficult for Beijing to ignore. Whatever issues it has had with Lai in the past, if he wins, China should be open to resuming dialogue, as it is keen to show progress in its effort at unification to its domestic audience after eight years of stagnation. At the same time, China should be realistic: unification discussions will not happen in the near term, in part because the prospect remains unpopular among a Taiwanese population where the majority prefers the status quo.

For its part, the U.S. should continue to seek to stabilise relations with China, building on the momentum from November’s Biden-Xi summit. It should signal Beijing again that it does not support Taiwan’s formal independence and is open to any outcome that is peacefully negotiated and mutually agreed upon, in line with its official “one China” policy. Washington should also reaffirm commitments to bolster Taiwan’s self-defence capability, but refrain from symbolic gestures, such as visits by high-level officials, that might provoke an excessive reaction from Beijing. Beijing should reassure both Washington and Taipei that peaceful reunification remains its preferred outcome and that it does not plan to attack Taiwan anytime soon.