19 January 2024

Wary Over Taiwan’s Election, Beijing and Taipei Still Need Each Other

Donald Kirk

The victory of the pro-independence, pro-America candidate for president of Taiwan opens a new chapter in the prolonged saga of the struggle of the Chinese island province to remain safe and secure and separate from China.

Just because Lai Ching-te, already vice president of Taiwan and leader of the ruling Democratic Progressive Party (DPP), is poised to take over as president, however, does not mean Chinese President Xi Jinping will act quickly and dramatically to “reunify” Taiwan and the mainland, as he has vowed.

Xi likely will keep up what has become routine harassment and intimidation by air into the island’s air defense identification zone, and by sea, near and occasionally within its territorial waters. Equally important, he can ban critical Taiwan imports, notably electronic items, and restrict Taiwan investment, also primarily in electronics, in the mainland.

Xi may play those games knowing that a majority of Taiwan voters are wary of Lai’s talk of de facto independence. Long before running for president, Lai upset China by insisting that Taiwan, formally still named the “Republic of China,” was a sovereign entity and should declare itself as such. During the campaign, however, he aligned himself, however reluctantly, with outgoing President Tsai Ing-wen, who has said firmly that Taiwan will endure as a totally self-governing province without inviting Chinese attack by declaring independence.

That shift in policy did not relieve the 33.5% of voters who supported Hou Yu-ih, leader of the old-time Kuomintang (KMT) or Nationalist Party, whose forces fled the mainland as Mao Zedong’s Red Army was roaring to victory in 1949. Another 26.5% cast their ballots for Ko Wen-je, a medical doctor who formed the Taiwan People’s Party.

Hou, a former police detective who has served as mayor of New Taipei City, the capital region, undoubtedly would have won if he somehow could have persuaded Ko, also a former Taipei mayor, to abandon his candidacy. His Kuomintang wound up with one seat more than the DPP in the legislative yuan, making the KMT a force with which Lai will have to contend during his presidency.

Both Hou and Ko advocate moderation and dialogue with Beijing as far preferable to the crisis that would be inevitable from challenging China with needless confrontation over words such as “autonomy” and “sovereignty.” Why talk about changing a status quo that has enabled the island state of 24 million people to become the world’s 22nd wealthiest entity, nation or not?

Call it what you will, Taiwan flourishes as an island at peace in a region swirling with potential for conflict, from the Korean peninsula to the South China Sea. The near-universal sense among many islanders — no matter their party — is, why rock the boat? Let’s keep the peace we’ve enjoyed for years.

As far as Xi is concerned, almost anyone would have been preferable to Lai. Xi may not go after Lai until after he’s inaugurated four months from now, but Danny Russel, former U.S. assistant secretary of State for East Asia and the Pacific, is sure he’ll show his displeasure eventually.

“Beijing will feel bound to punish Taiwan voters for disregarding Xi Jinping’s warnings and voting for William Lai,” said Russel, vice president for security of the Asia Society in New York. “Since Taiwan elected a ‘troublemaker,’ won’t Beijing oblige them by making trouble?”

As options for Beijing, Russel predicts “military signals” and “threatening warnings” — implying that China might try to scare Taiwan, its leaders and people, even more than it has been doing ever since Rep. Nancy Pelosi (D-Calif.), as speaker of the U.S. House of Representatives, led a congressional delegation to the island in August 2022.

Russel does believe, however, that “the urge to punish Taiwan will be blunted.” Beijing “wants to restrain President-elect Lai, not provoke him,” he said. Also, Beijing may be reluctant “to provoke Washington just as the U.S. heads into the turbulent campaign season.”

Yet another consideration is that China and its long lost province need each other. That inter-dependency cuts both ways.

The Chinese mainland has been a cash cow for the island province that lies 90 miles to the east, at the closest point, across the Taiwan Strait.

Taiwan’s finance industry reports that Taiwan exports to China accounted for 35.25% of Taiwan’s total exports last year of $432.5 billion, according to Nikkei Asia. In turn, Taiwan amassed a trade surplus of $80.5 billion with China, which accounted for 20% of Taiwan imports.

Simple though it might sound for Xi to lower the floodgates to the Taiwan onslaught, China needs what Taiwan does best. The Taiwan Semiconductor Manufacturing Company makes 90% of the world’s most advanced chips. Samsung in Korea is its only real competitor.

In the end, China and Taiwan need each other. They’re locked in an embrace in which money should talk more loudly than gunfire ignited by rhetoric.

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