Taiwan May Accelerate Steps to Improve China Ties After KMT's Election Win
Taiwan's President Ma Ying-jeou
Maurice Tsai/Bloomberg
Ma Ying-jeou, Taiwan's president.
Ma Ying-jeou, Taiwan's president. Photographer: Maurice Tsai/Bloomberg
Taiwan may speed up steps to improve relations with China after the ruling Kuomintang party did well in key local elections, an indication voters support President Ma Ying-jeou’s cooperation with the mainland.
The KMT won mayoral ballots in three of five cities on Nov. 27 with the opposition Democratic Progressive Party taking the remainder, according to the Central Election Commission. The five municipalities are home to about 60 percent of Taiwan’s 23 million people. The DPP won more votes overall.
“If the KMT interprets the election result as a mandate by the people on its policies, it would actually quicken the pace to improve ties with China,” said Liu Bih-rong, a professor of political science at Soochow University in Taipei. “One of their strategies may be to focus on the pro-KMT voters and retain them, since they may not be successful in getting the DPP share of votes.”
The benchmark Taiex Index rose 0.7 percent at the close of Taipei trading. The Taiwan dollar climbed 0.1 percent to NT$30.800 per U.S. dollar, according to Taipei Forex Inc.
Ma has faced resistance from the DPP, which is concerned he may put Taiwan’s sovereignty at stake as he pushes for closer economic ties with the mainland.
The KMT retained the mayorship of Taipei, its traditional stronghold, and the economic and political center of Taiwan, as well as Xinbei and Taichung cities. Ma and his predecessors, Chen Shui-bian and Lee Teng-hui, were former Taipei mayors.
Voters went to the poll Nov. 27, a day after the son of Taiwan’s former Vice President Lien Chan was shot and wounded during a KMT campaign rally.
Trade Accord
Lien in March 2004 lost the presidential race to Chen, who was shot on the eve of the election, which triggered street protests on allegations he may have staged the shooting to win sympathy votes. Lien, then chairman of the KMT, lost to Chen by 30,000 votes out of about 13 million cast.
Ma is betting that strengthening commercial ties with China, the world’s fastest-growing economy and the island’s biggest trading partner and investment destination, will help bolster Taiwan’s economy.
Taiwan on June 29 signed an Economic Cooperation Framework Agreement, its first trade accord with China to cut tariffs and increase access to services including banking, securities and insurance. Signing the deal opened the door for Taiwan to ink similar accords with other countries. Singapore and Taiwan agreed on Aug. 5 to discuss a free-trade agreement.
Policies to Stay
“Ma’s cross-strait policies will remain intact,” said Tony Phoo, a Taipei-based economist for Standard Chartered Plc. Still, “even though the KMT has won three seats, they have fallen behind in the amount of votes. It’s a warning for the ruling government, they have to drive harder in building on the economic front and regain confidence among swing voters.”
The KMT won 45 percent of total votes in the elections, trailing the DPP’s 50 percent tally, according to the commission.
“The KMT will take the lagging number of votes as a precaution and strive harder in future,” KMT Secretary-General King Pu-tsung said on the party’s website. He attributed the lower vote total to the Kaohsiung city election result, where a third candidate competed for KMT support. In Kaohsiung, the DPP won 52.8 percent of the votes and the KMT 20.5 percent, with independent Yang Chiu-hsing claiming almost 27 percent.
Cordial Ties
Relations between Taiwan and China, separated by the Taiwan Strait, are at the most cordial in more than 60 years after Ma dropped his predecessor’s pro-independence stance and made economic relations the priority of his administration.
Tsai Ing-wen, chairwoman of the DPP, opposes the China trade agreement on the grounds it would give Beijing greater influence over the island and costs jobs. Tsai lost the race for mayor of Xinbei city to Eric Chu, a former vice premier in Ma’s administration. Tsai in June rallied more than 10,000 to protest the accord.
The trade accord will help create more than 260,000 jobs in Taiwan and boost economic growth by 1.65 to 1.72 percentage points annually, Ma’s administration says.
“To boost domestic employment and salaries so as to narrow the wealth gap, President Ma may have to forge even closer economic and trade ties with Beijing,” said Chang Wu-ueh, a political science professor at Taipei’s Tamkang University.
China and Taiwan are set to hold a sixth round of cross- straits talks in Taiwan next month. Since Ma took office in 2008, the government has signed 14 agreements with the mainland. China regards Taiwan as part of its territory.
To contact the reporters on this story: Janet Ong in Taipei at jong3@bloomberg.net; Weiyi Lim in Taipei at wlim26@bloomberg.net
To contact the editor responsible for this story: Bill Austin at billaustin@bloomberg.net Paul Tighe at ptighe@bloomberg.net
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