Nov. 27 (Bloomberg) -- Taiwan’s ruling party Kuomintang won three of five seats in mayoral elections, signifying support for President Ma Ying-jeou’s pro-China policies.
The KMT took the seats in Taipei, Sinbei and Taichung, while the opposition Democratic Progress Party won the elections at Tainan and Kaohsiung, the candidates said in announcements broadcast on television. The vote came after Sean Lien, son of Taiwan’s former Vice President Lien Chan, was shot and wounded while campaigning for KMT yesterday.
“The win by the KMT means they will continue the pro-China policies to gain more votes in future elections,” Monika Yang, who helps oversee $2 billion at Hamon Asset Management Ltd. in Taipei, said by phone today. Economic and trade relations between the two sides will be “even closer,” said Chang Ling-chen, a professor at National Taiwan University.
Ma, who helped cement ties with China by abandoning his predecessor’s pro-independence stance after he took office two years ago, signed a trade agreement with the mainland and opened up the island for new investments.
Taiwanese-run factories in the mainland make 11 percent of China’s electronics exports including iPhones and Playstations, according to the Taiwan Institute of Economic Research. About 29 percent of the island’s overseas shipments head across the strait, government data show.
No More Uncertainty
The benchmark Taiex index gained 78 percent last year as improving relations with China boosted capital inflows. Taiwan stocks slid 0.5 percent at yesterday’s close and have advanced 1.5 percent this year.
“This uncertainty with the election is gone, so volume will increase in Monday’s trade and shares will probably rise at the start of the trade,” Yang said.
The Taiwan dollar has gained 3.9 percent this year to NT$30.830, according to Taipei Forex Inc.
Taiwan’s seasonally jobless rate fell to a two-year low of 4.96 percent in October, higher than the 3 percent target Ma pledged to achieve during his 2008 presidential campaign. Taiwan’s economy expanded faster than estimated in the third quarter, as improved ties with China helped boost trade and attract tourists, a government report showed this month.
Gross domestic product rose 9.8 percent in the three months through September from a year earlier, after climbing a revised 12.86 percent in the second quarter, the statistics bureau said in Taipei on Nov. 18.
China regards Taiwan as part of its territory and has threatened to invade if the island declares formal independence. The two sides have been ruled separately since Chiang Kai-shek’s Kuomintang, or Nationalists, fled to the island after being defeated by Mao Zedong’s Communists in 1949.
Ma had said the trade accord with China won’t harm the island’s “sovereignty.” He said a reduction in cross-strait tensions will encourage the mainland “in the long run” to remove the more than 1,000 missiles it has aimed at Taiwan.
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