"We failed. The Nationalist Party lost the elections. We didn't work hard enough,” Eric Chu said on Saturday before taking a long bow in front of a “thin” crowd of supporters.
Chu stepped in to become the Nationalist Party (KMT) candidate in Taiwan’s presidential race when his predecessor was deemed too divisive. The island held two elections on Saturday, one for the presidency and one for seats in the national legislature - The Democratic Progressive Party scored resounding victories in both ballots.
The DPP candidate and former law professor Tsai Ing-wen became the island’s first female president after claiming 56% of the vote in the biggest landslide since the island's first democratic election twenty years ago.
Chu only managed to garner 31%.
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Tsai will enjoy a friendly body of lawmakers as the DPP won 68 seats in the 113-seat legislature versus 36 for the Nationalists. Previously, KMT held 64 seats and this will be DPP's first ever majority.
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Taiwan has spent eight years under KMT rule and ahead of the ballot, it was readily apparent that voters were ready for a change, with Tsai maintaining a commanding lead in opinion polls:
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That, in turn, led Taiwan observers to predict that the legislature would likely fall to DPP as well. “If history is any indication, the KMT may lose its majority in parliament as well, given that for the two occasions when KMT lost the presidential elections (2000 and 2004), it also failed to win the majority of seats against the DPP in parliament,” Goldman wrote, in the days before the election.
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The vote raises the specter of conflict with China. "While Tsai has pledged to maintain ties with Beijing, the DPP’s charter supports independence," Bloomberg notes [13], before ominously reminding readers that "The Chinese Communist Party passed a law allowing an attack to prevent secession in 2005, when the last DPP president, Chen Shui-bian, sought a referendum on statehood."
Underscoring how frosty relations (still) are, sixteen-year-old pop star Chou Tzu-yu had her activities in China suspended by her management company after waving a Taiwanese flag on a South Korean TV program. She was compelled to apologize in a televised address in order to avoid, in AP's words [14], "offending nationalist sentiments on the mainland."
“I’m sorry, I should have come out earlier to apologize,” she says, in a statement that sounds like it might have been beaten out of someone who shorted Chinese stocks last summer. “I didn’t come out until now because I didn't know how to face the situation and the public."
“There is only one China,” she adds, staring blankly into the camera before promising to behave going forward. “I am proud I am Chinese. As a Chinese person, while participating in activities abroad, my improper behavior hurt my company and netizens on both sides of the Strait. I feel deeply sorry and guilty. I decided to reflect on myself seriously and suspend all my activities in China.”
Chou's predicament was denounced by new President Tsai, who told reporters that "this particular incident will serve as a constant reminder to me about the importance of our country's strength and unity." And by "country" she probably doesn't mean China.
"Although Ms. Tsai has vowed to maintain a broadly stable relationship with mainland China, she remains reticent on specific strategies and has remained ambiguous about the ‘1992 consensus’ which has supported the principle of “one China” although each side has been allowed to interpret it differently," Goldman writes. "Her position has been that this is an option for Taiwan, but not the only one."
Still, analysts say Tsai likely won't move to anger Xi - at least not immediately.
"As long as Tsai doesn't provoke the other side, it's OK," one former newspaper distribution agent who attended Tsai's rally told AP. "Tsai won’t provoke China for sure, but she won’t satisfy its demands," said George Tsai, a politics professor at Chinese Cultural University in Taipei adds.
For his part, Chu just can't seem to figure out where things went awry. "Why has public opinion changed so much? How did our party misread public opinion? Our policy ideas, the people in our camp, the way we communicate with society -- are there major problems there? Why did we fail to self-examine and lose power in the central government and lose our legislative majority?," he asked himself during a concession speech at Kuomintang headquarters.
The answer to all of Chu's questions is simple. "The landslide was propelled by anxiety over stagnant wages, high home prices and dissatisfaction with President Ma Ying-jeou’s polices of rapprochement with Taiwan’s one-time civil war foes on mainland China," Bloomberg writes, summing things up nicely before adding that "Tsai will bear the task of resuscitating an economy expected to have grown last year at its slowest pace since at least 2009."
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The quandary here should be obvious: given the slowdown in mainland demand and the yuan deval, this isn't exactly the ideal time for Taiwan to be poking China in the eye with a stick."The election comes at a tricky time for Taiwan's export-dependent economy, which slipped into recession in the third quarter last year," Reuters said [16] after the election. "China is Taiwan's top trading partner and Taiwan's favourite investment destination."
Indeed. Exports to China dropped a whopping 16.4% last month and were down nearly 20% Y/Y in November. Overall, exports fell 13.9% in December and were down 10.6% for the year. Exports to China fell 12.3% in 2015.
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As for regional security and the ongoing cold war for two chains of islands in the Pacific, AP goes on to say that "Tsai [has] reaffirmed Taiwan's sovereignty claim over East China Sea islands also claimed by China but controlled by Japan [and] says Taiwan will work to lower tensions in the South China Sea, where it, China and four other governments share overlapping territorial claims."
In short then, Tsai has her hands full. She needs to satisfy her base by scaling back ties with China while keeping cross-Strait relations amicable enough to ensure that trade isn't imperiled at a time when exports are already in free fall. Meanwhile, Taiwan is also mired in the increasingly petulant spat over a series of sparsely populated islands in the region.
Good luck Ms. Tsai and remember, "Big Uncle" Xi is watching...
