Editorial Board

A New Dawn for Taiwan and China

President-elect Tsai Ing-wen and Xi Jinping have an opportunity to repair broken ties.

The pro-independence DPP won in a landslide.

Photographer: Ulet Ifansasti/Getty Images

A sweeping victory for Taiwan’s independence-minded Democratic Progressive Party in this weekend’s elections seems to guarantee a renewal of tensions with mainland China, which considers the island part of its sovereign territory. In fact, the vote could put relations on a more solid footing, if both sides exercise moderation in the coming months.

Taiwan’s Tightrope

However striking the vote, this wasn’t a call for independence. While fewer and fewer Taiwanese want to reunify with the mainland, not that many more favor de jure independence -- only about a fifth of the population, according to recent polls. Indeed, while opinions vary about how closely Taiwan should or shouldn’t integrate its economy with the mainland’s, there's little doubt most Taiwanese would like to maintain the ambiguous political status quo. That means threats from Beijing and adventurism from Taiwan’s new rulers are equally likely to provoke a popular backlash.

Neither side can afford that. Chinese President Xi Jinping is wrestling with a difficult economic transition that’s roiling global markets. And President-elect Tsai Ing-wen staked her campaign on revitalizing Taiwan’s contracting economy. That’s going to require maintaining stable relations with the mainland -- which absorbs around 40 percent of Taiwan’s exports -- even as she seeks to expand trade with other nations. China could easily block any bid by Taiwan to join the Trans-Pacific Partnership, for instance -- a pact that could otherwise provide a major boost to the island’s economy.

Xi already made a gesture of goodwill in meeting with Taiwan’s incumbent President Ma Ying-jeou in November -- the first such summit since 1945 -- even if his goal was to bolster the electoral strength of Ma’s Kuomintang Party. Any credit Xi might have earned, though, would quickly be lost if he now sought to isolate the leader Taiwanese have chosen. It would be more productive to leave open the option of sitting down with Tsai -- who handled relations with the mainland under her party’s previous administration -- after her inauguration in May. If Xi begins now to establish communication channels, it could both avoid misunderstandings and help Tsai rein in radicals in her own party, who might otherwise be emboldened by the size of their victory.

Tsai has so far been vague about her views on ties with the mainland. She’s refused to embrace the so-called 1992 Consensus, under which the two sides agreed that there was only “one China” but disagreed about what that meant. Her foremost task in the interregnum period should be to find a new formula, one that is acceptable to Xi as well. The fact is, while her supporters have valid concerns about the “hollowing out” of Taiwan’s economy as entrepreneurs and businesses shift to the mainland, the island would probably benefit from opening up further to Chinese investment and services, as South Korea and other Asian countries have. Tsai’s challenge is to lay the political groundwork for that opportunity.

The new administration may indeed pose a greater possibility for friction with China, but it also offers the potential for a more stable rapprochement. In 2014, when Ma attempted to ram through a services trade pact with the mainland, angry students occupied the legislature. Tsai has more credibility to make deals with China, and both she and Xi would do well to take advantage of the opening.

    --Editors: Nisid Hajari, Mary Duenwald

    To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net .

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