Tough job ahead for Taiwan’s new president

Taiwan is between a rock and a hard place. It needs China for economic reasons, but continues to be apprehensive about Beijing’s “assertive policy”. The future path of Taiwan’s independence-leaning president-elect Tsai Ing-wen is fraught with economic challenges as the island’s economy has been contracting year-on-year for three straight quarters.
Beijing’s fears that Tsai may not sustain the ‘one nation and two systems’, could affect economic ties with Taipei.
With 15-straight months of contraction dragging on the economy, Tsai needs China, the biggest exports market to Taiwan, whose exports are the biggest contributor to gross domestic product. Taiwanese talents are also looking for greener pastures, especially in the mainland China.
For Taiwan to sustain growth of its tourism sector, it has to keep status quo with China. Growing Chinese concerns in the wake of Tsai’s election has already taken a toll on tourism as tourists from the mainland have dropped. Yet, Beijing can’t pressure Taipei hard out of fear it could push it further towards strengthening ties with the US, the main ally of Taiwan.
The President-elect may face the deepening energy challenge as her progressive voter base is strongly against nuclear power. The first of Taiwan’s three nuclear power plants are entering retirement in 2018, leaving business voices such as the American Chamber of Commerce wondering how Taiwan will fill potential energy shortfalls.
One has to see how Tsai strikes a balance between voters’ dreams of national pride and a Beijing that wants the island on a short leash.
But the issue is rather complicated. Tsai’s election victory reflected public desire for a president who would put self-ruling Taiwan first, not what they call “sell out” to China, which still sees the island as part of its territory.
Tsai, whose Democratic Progressive Party is traditionally pro-independence, has never accepted the notion of one state, although she has pledged to maintain the “status quo” with Beijing.
But this pledge hasn’t convinced critical China, which has already been making life difficult for Taiwan since Tsai was elected in January.
A veiled threat came from China’s Taiwan Affairs Office (TAO), which recently said responsibility for any cross-strait crisis “must be shouldered by those who change the status quo”.
Worse still, Beijing has also warned Taiwan against any attempt to formally declare independence. Although Taiwan has developed into a fully-fledged democracy since splitting with the mainland in 1949 after a civil war, it has never officially declared a breakaway.
Tsai may not provoke China to give it any excuse to slap economic sanctions on Taipei, but she would likely gradually reduce Taiwan’s economic dependence on the mainland. She is looking forward to developing the island as a research and development hub for industries, including defence and green energy, and building economic partnerships with Southeast Asia and India.
Perturbed by the Friday inauguration of the Taiwan’s Beijing-sceptic president-elect Tsai Ing-wen, China held large military exercises in Fujian province. This is another veiled threat to Tsai not to fish in troubled waters.
Despite her independence trends, Tsai will follow footsteps of her predecessor at least for now. Rapprochement with Beijing benefits Taiwan economically though this is not satisfactory to the nationalist Taiwanese.
Outgoing president Ma Ying-jeou accepted a tacit agreement — known as the “1992 consensus” — between his Kuomintang party and Beijing which acknowledges there is only “one China”.
But Tsai and the DPP have never recognised the agreement and are under pressure from Beijing to do so. It has been sending assertive messages across the Taiwan Strait since Tsai was elected.
Beijing and Taipei have to strike a balance to work out a viable policy that addresses mutual interest of the two parties, on the economic and political front.