Council for Strategic Affairs

Council for Strategic Affairs

Taiwan Election Results and India-Taiwan Relations

By Amod Desai & Dr. A Adityanjee

Introduction:

The Taiwan elections held on January 13th, 2024, are significant for global geopolitics, particularly in the context of the evolving dynamics in the Indo-Pacific region. The victory of Vice President Dr. William Lai Ching-Te of the Democratic Progressive Party (DPP) and the subsequent political developments in Taiwan have created both opportunities and challenges. Lai’s DPP secured just over 40% of the vote in the presidential elections, while the Kuomintang (KMT) and Taiwan People’s Party (TPP) received 33.5% and 26.5%, respectively. The overall voter turn-out was 71.86% which is lower than the over turnout of 74.9% in 2020, suggesting some degree of voter fatigue. The 3-cornered elections were contested on mainly economic issues such as volatility and housing costs, which were central to the elections. There is also a growing concern about over-dependence on economic ties with China. Also, the issues of cross-strait relations, Taiwan’s sovereignty and maintenance of peace were important factors.

Presidential Contest:

This is the first time since 1996 when direct elections were instituted for the post of the president in Taiwan that a party is getting the third successive presidential term despite anti-incumbency feelings. In that sense, it is a historic win for the DPP as a political party in Taiwan. The KMT had fervently hoped to turn around and get back the Presidency during this election cycle. Unfortunately, the failure of putting a unified ticket by the KMT and the TPP did hurt the opposition’s chances. The KMT candidate Hou Yu-ih, mayor of Taipei and a former police officer, did realize that his prospects were hurt by the “out of turn” pro-Xi Jinping statements by the former President and the KMT leader Ma Ying-Jeau who claimed that Taiwan cannot win a war against the Communist China. Ma’s exhortations to the Taiwanese electorate to trust the wisdom of Xi Jinping created suspicions about his and KMT’s loyalties amongst the minds of the Taiwanese voters. Mr. Hou Yu-ih tried to distance himself from former President Ma Ying-Jeau proclaiming that these were Ma’s personal views that he did not share. As a measure of rebuke, former President Ma Ying-Jeau was not even invited to the election night rally of the KMT. Interestingly, Lai’s DPP and the 1st runner-up Kuomintang (KMT) party must watch out for the third-party candidate and a former mayor of Taipei, Dr. Ko Wen-Je of the TPP, who has won more third-party votes than any candidate since 2000. The critique of the TPP is that it is a one-person party held together by the personal charisma of Dr. Ko Wen-Je. It is likely that a centrist TPP may attract more and more younger voters in Taiwan and may practically drive the old guard led KMT out of mainstream politics in next few years! As the older voters who were born in the mainland China die and are replaced by much younger Taiwan-born voters who cherish their Taiwanese identity, the KMT may need to reinvent itself or face a slow electoral death.

The KMT candidate Hou Yu-ih was gracious in accepting his defeat even while vote counting was going on and congratulated the President-elect. He also apologized profusely to his party and supporters for his failure to clinch the presidency. Results are indeed a final curtain on the presidential ambitions of Hou Yu-ih. He goes back to his job as the Mayor of Taipei after having been absent for several months. There is a recall petition against him by angry citizens of Taipei. President-elect Lai Ching-Te will be inaugurated on May 20th, 2024, giving him enough time to cobble up his cabinet and a governing coalition.

Legislative Branch Elections:

However, the DPP lost several seats in the Legislative Yuan which has a total number of 113 seats, which complicates Lai’s ability to push forward the DPP agenda. The KMT has the largest number of seats (52) in the legislative Yuan, followed by the DPP (51 seats) with TPP garnering 8 seats. While the KMT gained 14 seats (previously 38) in the legislative Yuan, DPP was the net loser of 11 seats (previously 61). TPP increased its seat share from 5 in 2020 to 8 in the current elections. While the vote share of the KMT in the legislative Yuan is somewhat higher than presidential elections (34.58% versus 33.49%); DPP vote share is almost 4% lower in Legislative Yuan elections (36.16%). The same is true for the TPP that secured only 22.07% of the votes in the legislative Yuan, 4% lower than the presidential contest. The NPP (National people’s Party) received 2.57% of the votes but did not get any seats in the legislative Yuan. Others garnered only 2 seats (previously 6) in the legislative Yuan despite a vote share of 4.62%. It will be a tough challenge for the DPP to govern in a situation where it does not have the majority in the legislative Yuan. The key posts of the Prime Minister and the Speaker of the legislative Yuan may have to be shared with the opposition parties. The DPP does have an institutional memory of governing without having a majority in the legislative Yuan. President Chen Shui-Bian of the DPP governed for 8 years from 2000 to 2008 while the KMT controlled the legislative Yuan.

Taiwan election Results and the CCP:

Taiwan’s election results are closely watched by the Beijing, given the longstanding tension between Taiwan and the People’s Republic of China (PRC). The CCP (Chinese Communist Party) and the Chinese government did not show the extremely bellicose and belligerent behaviors including the blockade of Taiwan that they displayed prior to the first direct presidential elections in 1996. The PLA continued the grey zone tactics by serial violations of Taiwanese airspace and multiple intrusions by PLAN vessels in Taiwanese waters prior to the elections. The DPP’s pro-independence stance poses a challenge to Beijing’s so-called “One China” policy. Communist China indeed characterized Dr. Lai Ching-Te as instigator of war and a troublemaker. The election of a DPP candidate could lead to heightened tensions and a more assertive stance from Beijing, as evidenced by their diplomatic and economic measures following the elections. Since 1895 onwards, the mainland China has governed Taiwan only for a period four years. There is some speculation that Xi Jinping may consider invading Taiwan in 2027 to coincide with the 100th anniversary of the founding of the PLA. He may learn from Putin’s mistakes in Ukraine and consider avoiding a full scale invasion of Taiwan.

International Response:

It will be interesting to observe if the United States and other Western countries will continue to show increasing support for Taiwan. President Joe Biden has in the past stated that US will defend Taiwan in case of Chinese invasion shedding any strategic ambiguity. Under Taiwan Relations Act, the US is duty bound to protect and guard sovereignty of Taiwan. The US has been lagging in supplying modern armaments to Taiwan and there is a backlog of orders worth $10 billion. The regional block of ASEAN and other countries such as Japan and South Korea would be more encouraged by this verdict, enforcing the defiant stance against China’s aggressive stance in the region. China has usurped the old colonial policy of “divide and rule” by isolating the Philippines and dealing with other ASEAN countries bilaterally. China’s paramount leader Xi Jinping had firmly reminded President Joe Biden in November 2023 on the sidelines of the APEC meeting in San Fransisco that reunification of Taiwan with the mainland China is historically inevitable. What a newly elected and inaugurated US president in 2025 would do in this regard is subject to the vagaries of the US electoral system.

Implications on the Global Commerce:

Global business conglomerates and corporates are fearful because Taiwan’s significant role in the global supply chains, particularly in semiconductor manufacturing, means that any political instability could have far-reaching economic implications. Taiwan started the process of de-risking from China in the year 2001. Taiwan will continue to employ de-risking and delinking its economy from mainland China in near future keeping in view the hostility shown by the CCP. Taiwan’s foreign exchange reserves currently stand at $570 billion making it an important source of FDI in other countries. Increased geopolitical tensions could lead to disruptions in trade and impact global markets. The fear by multinational corporations is not unfounded, as Taiwan’s stance on democracy and human rights, especially under a DPP-led government, could inspire or influence democratic movements and policies in other parts of the world, particularly in the context of rising authoritarianism in China and North Korea. The US corporate sector will continue friend-shoring from Communist China to ASEAN countries, India and Mexico in an attempt to de-risk and de-link the US economy from the Chinese. The election results could lead to potential flashpoints in the Taiwan Strait, necessitating careful crisis management by major powers to avoid escalation into a larger conflict.

India-Taiwan Relations:

Although India-Taiwan relations are not formalized at the diplomatic level, there has been a significant uptick in recent years. The ties are characterized by growing trade, investment, and people-to-people (P2P) relations. There has been a considerable increase in bilateral trade and investment between India and Taiwan, including cooperation in areas like technology, manufacturing, and education. In year 2000, the bilateral India Taiwan trade was only $ one billion. It has increased to $ 7.7 billion in 2021. There are a total of 250 Taiwanese companies in India. Currently, the total Taiwanese investment in India is $5 billion. A single company like Foxconn has invested $1.5 billion in India. It has an advanced semiconductor chip manufacturing plant in Bangalore. It has promised to increase its investment manifolds.

Both nations share common interests in maintaining stability and peace in the Indo-Pacific region. Their relations are also influenced by their respective ties with Communist China. There is growth in Cultural and Educational exchanges between India and Taiwan, with both countries actively promoting people-to-people (P2P) contacts. Several Taiwanese and Indian students are choosing to study in each other’s countries. Taiwan can serve an important destination for Indian students, diplomats, analysts and policy planners for learning Mandarin and other Chinese dialects besides learning Taiwanese language. There is tremendous goodwill in Indian civil society for Taiwanese people. Communist China has consistently blocked Taiwan’s membership in WHO making it difficult for Taiwan to dela with global pandemics like COVID. India’s leadership and experience in vaccine manufacturing can serve as a nidus for a burgeoning relationship in public health and pharmaceutical sectors.

The election results in Taiwan could have implications for India-Taiwan relations. The DPP’s stance on China, which leans towards maintaining Taiwan’s de facto independence, aligns with India’s strategic interests in the region. This could lead to a further deepening of ties, especially in areas like trade and technology. Moreover, as Taiwan seeks to reduce its economic dependence on China, India could emerge as a significant partner. Owing to lack of diplomatic recognition of Taiwan, there cannot be Government to Government relationship (G2G). However, People to people (P2P) relations and business to business (B2B) are on the upswing. Thinktanks from both countries are putting their brains together to create a win-win formula. Taiwan could benefit from importing Indian workers to the tune of 100,000 as it is labor shortage country. India under Atma Nirbhar Bharat scheme is emerging an important exporter of arms. India is selling Brahmos cruise missiles, frigates, and Tejas MK2 fighter aircrafts to other countries. Taiwan might consider purchasing reliable and advanced military hardware from India.

Mr. Amod Desai
member of the Board of Directors of the CSA and serves as the Chief Financial Officer of the CSA.. He is based in McLean, Virginia, USA.

Dr. A Adityanjee
President of the CSA and serves as the Chairperson, Board of Directors of the CSA. He is based in Cleveland, OH, USA

Conclusions:

In conclusion, the 2024 Taiwan elections have not only reshaped the island’s internal political dynamics but also carried strategic implications for its international relations, particularly with countries like India. As India and Taiwan continue to strengthen their multi-dimensional ties, it will be interesting to observe how these relationships evolve in the context of regional politics and global economic trends.