Pro-China Party's Big Win in Taiwan Puts Tsai Future in Doubt

(Bloomberg) -- Taiwan’s pro-independence leader, Tsai Ing-wen, has just over a year to win back public support if she wants to avoid going down in history as the island’s first one-term president.

Her Democratic Progressive Party suffered a resounding loss to the China-friendly Kuomintang in local elections on Saturday. The scale of the defeat was far greater than forecast, with the DPP losing seven cities and counties of the 13 they held -- including its traditional bastions of Kaohsiung and Yilan.

Pro-China Party's Big Win in Taiwan Puts Tsai Future in Doubt

Now with just 14 months to go until the presidential election in January 2020, Tsai faces a challenge to turn things around. Although she resigned as head of the DPP after the election loss, Tsai faces no obvious challengers from within who might stop her from seeking a second term as president.

“This result demands a response from Tsai, and the obvious change would be to emphasize the DPP’s strengths and the things that got Tsai in,” said Jonathan Sullivan, director of Nottingham University’s China Policy Institute. “Tsai has made a liberal, progressive society a big part of her appeals to the rest of the world to support Taiwan in juxtaposition to an increasingly repressive China.”

Saturday’s election saw a “Blue Wave” sweep Taiwan in a resurgence of the KMT after Tsai comprehensively ousted the party from power in 2016. The size of the swing was evident in the popular vote: On Saturday, KMT candidates won 48.8 percent of the overall vote, compared to 39.2 percent for the DPP. In 2016, Tsai had trounced her KMT challenger by 25 percentage points.

Pro-China Party's Big Win in Taiwan Puts Tsai Future in Doubt

The KMT promotes better ties -- and eventual unification -- with China. A return to power for the party would be seen as a welcome development by the Chinese authorities, which have frozen all direct contact with Tsai after she declined to accept Beijing’s claim that Taiwan belongs to “one China.”

In an opinion piece Monday, the Chinese government-run China Daily placed the blame for the DPP’s defeat on Tsai’s policy toward the mainland. “The Tsai administration’s secessionist stance has not only soured its crucial relations with the Chinese mainland, but also made it unpopular with people on both sides of the straits,” it said.

By most economic metrics, Tsai hasn’t performed badly as president. The economy has grown faster than three percent for most of the past year, the benchmark Taiex index traded above 10,000 points for much of 2018 and unemployment is at its lowest since the 1990s. And while wage growth remains slow, it has grown more rapidly under Tsai than under her predecessor Ma Ying-jeou of the KMT.

Still, Tsai’s caution regarding key domestic issues such as labor reforms and same-sex marriage -- rather than her dealings with China -- were seen as key causes for the DPP’s defeat. In a number of referendums held at the same time as Saturday’s elections, voters also rejected marriage equality for same-sex couples and a proposal for athletes to compete under the name “Taiwan” rather than the current moniker, “Chinese Taipei.”

“The elections this time did not have much to do with unification with China or Taiwan independence,” said Austin Wang, a political scientist at University of Nevada, Las Vegas. “What voters cared about was penalizing the DPP and Tsai Ing-wen.”

The star of the KMT’s revival was Han Kuo-yu, who was elected mayor of Kaohsiung City -- a seat the DPP has held since 1998. The pugnacious former lawmaker was given little hope of succeeding in one of the DPP’s southern strongholds, even by some in his own party.

But a combination of Han’s plain campaign language, his blunt assessments of Kaohsiung’s ills and his promise to bring an economic boom through better ties with China won the city’s residents over, according to Kaohsiung-based radio host and political commentator Chen Tzu-yu.

Pension Reform

Some of Tsai’s backers attributed the loss to widespread dissatisfaction with her leadership. Her efforts to cut retired public servants’ pensions angered KMT voters, who make up a large portion of Taiwan’s civil service, while DPP supporters said she didn’t do enough to pursue promised reforms or support progressive referendum proposals.

“The electoral results did not mean Taiwanese people have chosen to become closer to China,” said Lai Chung-chiang, head of civil group Economic Democracy Union, which was heavily involved in 2014 protests that thwarted former KMT President Ma’s attempt to deepen Taiwan’s trade ties with China. “Rather, the outcome marked voters’ dissatisfaction with President Tsai Ing-wen’s governance.”

‘Take the Shackles Off’

To win back support, several analysts said Tsai should move closer to the U.S., which sells weapons to Taiwan to defend against forceful unification by the mainland.

“She will need to express clearly that Taiwan is happy to bolster cooperation with the U.S., while she also needs to make it clear that Taiwan is not trying to lock horns with China” said Jou Yi-cheng, who was once a speechwriter for former President Chen Shui-bian, a DPP member. “Taiwan doesn’t deny its cultural links with China, but instead it is championing the universal values of freedom and democracy.”

Sullivan from Nottingham University said Tsai should take an even tougher stance on China.

“It is time to take the shackles off,” he said. “Caution in cross-Strait policy has delivered nothing -- China won’t work with her and has really stepped up its pressure across the board, so its difficult to see what Tsai loses by pursuing the more robust path the pro-Taiwan base demands.”

©2018 Bloomberg L.P.