Managing the Taiwan Election Aftermath

Taiwan’s voters yet again proved their pragmatism, electing incumbent vice president Lai Ching-te as president-elect and delivering the most seats in the legislative yuan to the opposition Kuomintang Party. This outcome is a vote for continuity and a call for Taiwan’s leaders to forge compromise. It reflects Taiwan voters’ overwhelming support for preserving the cross-Strait status quo, protecting democratic governance and individual liberties, and promoting economic opportunity.

This election outcome offers ample opportunity for the United States and Taiwan to advance relations, provided both sides adhere to the unwritten rules for managing the relationship. These include maintaining open and frequent private communication between Washington and Taipei; avoiding any surprises on issues that implicate each other’s vital interests; maintaining transparency with each other on interactions with the mainland that touch upon cross-Strait issues; and respecting the golden rule of preserving bipartisan support in both directions for the relationship.

The coming year will not be a period for bold creativity in reimaging U.S.-Taiwan relations. The Lai administration will be busy developing patterns of compromise with other political parties in Taiwan. Lai also will be interested in proving his consistency, predictability, and stewardship of the cross-Strait status quo. Similarly, members of the Biden administration will be focused on America’s elections. They will approach re-election as an existential issue for the future of democracy in America. Even as they will be unflinchingly firm in pushing back on Chinese pressure against Taiwan, they will have limited bandwidth for major new foreign policy initiatives.

In this environment, there are still important steps Washington and Taipei could take to sustain momentum in advancing U.S.-Taiwan relations. These include working to accelerate delivery of defense equipment to Taiwan and strengthening stockpiles of critical medicines, food, munitions, and energy in Taiwan. Both these steps would help disabuse any hope in Beijing that it could compel Taiwan to capitulate under pressure.

The U.S. and Taiwan also should push forward their economic agenda, including by finalizing a double taxation agreement and locking in the next phase of the 21st Century trade agreement around labor and environmental standards. Taiwan also could take further steps to develop relations with American governors and mayors, who will play increasingly important roles while Washington remains gridlocked.

If Washington and Taipei focus on these practical, concrete steps over the coming months, they will put the relationship on an even stronger footing heading into 2025.

President-elect Lai Ching-te will step into an immediate dual challenge: responding to domestic dissatisfaction with the ruling party and navigating China’s ever-mounting pressures. Lai’s slim victory, achieved with a mere plurality in a three-way presidential race and coinciding with a loss of legislative majority, reflects a popular desire for change after the Democratic Progressive Party’s (DPP’s) eight-year rule. Lai must tackle the domestic issues that have alienated young voters from the DPP, notably stagnant wages, high housing prices, and a perception of governmental complacency. This task will be further complicated by a now-divided legislature.

The challenge from Beijing is even more pressing. Having dealt with previous DPP presidents Chen Shui-bian and Tsai Ing-wen, Beijing sees Lai as a continuation of Taiwan’s steady move towards independence and thus will likely waste no time launching a new round of economic and diplomatic offensives, including further suspension of tariff concessions under the Economic Cooperation Framework Agreement (ECFA) and tightening restrictions on Taiwan’s already limited international space, as demonstrated by Nauru’s severing ties with Taiwan to ally with the People’s Republic of China (PRC) shortly after the election. Additionally, China will persist in normalizing its military presence around Taiwan, crossing the median line of the Taiwan Strait and penetrating Taiwan’s Air Defense Identification Zone (ADIZ). While no full-blown conflicts are anticipated in the near future, these coercive tactics dangerously escalate tensions.

The most prudent approach for Lai would be to maintain a readiness for dialogue with Beijing, while simultaneously standing firm against any preconditions that contradict the interests of the Taiwanese populace. While Lai rejects China’s sovereignty assertion over Taiwan, to reinforce his commitment to maintaining the status quo he is expected to reaffirm his government’s adherence to the Republic of China’s Constitution. This would signal an avoidance of any radical moves towards formal independence, such as constitutional amendments. Lai must carefully avoid actions or rhetoric that could cause him to be labeled a provocateur, especially as he aims for re-election in four years to extend the DPP’s rule for another term.

A sensible approach for Beijing might entail reassessing its position towards a DPP government, given that Taiwanese voters have increasingly favored DPP candidates over Kuomintang (KMT) since the island’s inaugural direct presidential election in 1996. However, it appears unlikely that Xi Jinping will adopt such a stance. To counter Beijing’s increasing pressure, Lai plans to follow Tsai Ing-wen’s approach by strengthening ties with the United States and other democratic nations. The DPP views Taiwan-U.S. relations as stronger than ever, and Lai is committed to maintaining this robust partnership.

The wildcard, however, is the forthcoming U.S. presidential election. A continued Biden administration would sustain a high level of predictability in the trilateral U.S.-China-Taiwan relationship. Yet, a change in the White House could disrupt or dismantle the delicate balance. Many in Taiwan see Trump as tough on China, but Trump’s isolationist tendencies, shaky relations with allies, and transactional view of Taiwan were unsettling for Taiwan’s security. A return to such an erratic foreign policy stance would not only embolden Beijing and leave Taiwan vulnerable, but would also compromise America’s influence and credibility in a strategically vital region.

Taipei is facing two challenges: first, a divided government in which the DPP holds the executive branch but an opposition coalition will likely control the legislature; second, Beijing’s deep distrust of Lai Ching-te precludes any possibility of credible dialogue between authorities on both sides of the Taiwan Strait. Lai is in a tough position ahead of his inauguration, because the legislature takes office February 1 and can start setting the public debate and conditions under which he will assume office in May.

Lai needs to navigate a domestic environment that is likely to highlight political partisanship without stepping outside the bounds of what the majority of Taiwan people want in cross-Strait relations—namely, the status quo of preserving Taiwan’s democratic system without getting into a war with the well-armed and aggressive People’s Republic of China. Lai should consider how to promote effective governance under these circumstances through his cabinet choices. He could bring in some centrists or politicians affiliated with the opposition parties, to preemptively deflect partisan criticism and fulfill his promise to work in consultation and cooperation with his political opponents.

Lai, and Vice President-elect Hsiao Bi-khim, will also need to reassure the United States that they can manage the cross-Strait relationship prudently and work on an unofficial basis to coordinate on joint priorities and initiatives. Hsiao is in a favorable position to do just that, having worked in Washington for the past several years as Taiwan’s envoy to the U.S., forging strong relationships with key U.S. players on Taiwan policy.

The good news in the immediate period ahead is that all three sides—Washington, Beijing, and Taipei—have reasons to avoid a cross-Strait crisis. Beijing is still sailing into economic headwinds and focused on combatting corruption at high-levels and throughout the People’s Liberation Army (PLA). The U.S. is gearing up for yet another divisive election season in which neither the Biden administration nor the Chinese Communist Party (CCP) want Taiwan to be a focal point of public attention. Taipei needs a quiet period to bridge administrations, receive defense deliveries from the U.S., and regroup from losing yet another diplomatic ally after Nauru switched recognition earlier this week.

This unofficial (and likely temporary) détente gives Lai time to prove he is not a firebrand and explore how far he can go in extending an olive branch to Beijing in his inaugural speech. And though the two sides of the Strait are not talking, Washington can be an important bridge between Taipei and Beijing, working to ensure that messages are accurately conveyed and understood.

Of course, it’s best to do so quietly and at extremely high—and therefore, authoritative—levels, such as the meeting just before the election between Secretary Antony Blinken and Minister Liu Jianchao, head of the CCP’s International Liaison Department. The exchange may not have staved off Beijing’s harshly worded statements about Lai and the DPP, stopped its military exercises in the Taiwan Strait, nor kept Washington from publicly expressing support for Taiwan’s democratic election. But it seems to have contributed to clarifying intentions and reducing misperceptions, all of which is good for Taiwan, the U.S., and the world.

In the immediate aftermath of his election victory, Lai Ching-te is best served keeping his head down and emphasizing that he will maintain continuity with the Tsai administration. In essence, though it probably worked against him in electioneering, it makes the most sense for him to come off as politically colorless as possible at the start of his term.

Lai’s past history of pro-independence statements will forever haunt him. China will likely try to amplify it in order to alarm U.S. critics of the pan-Green coalition of parties Lai’s Democratic Progressive Party (DPP) leads and undermine the strengthening U.S.-Taiwan relationship.

This does not mean that Lai cannot gradually try to expand the amount of international space Taiwan has. There will be opportunities to take a strong stance against China on actions such as its poaching of Nauru as a diplomatic ally a mere two days after his election victory. However, Lai needs to play it safe, wait for the right political opportunities to open up, and emphasize that his actions will not be unilateral but will be taken in coordination with allies.

Lai may have his work cut out for him in that the domestic opposition of the Kuomintang (KMT) will also attempt to play up the perception of him as always secretly harboring pro-independence views in his heart of hearts. But neither can Lai overcompensate, as occurred when he tried to shift too much in the other direction with comments in 2017 about how it was possible to “Love Taiwan while being pro-China” and calling for unity on the basis of such views. This was part of what appeared to be a poorly thought-out attempt to modulate his image as his profile for a presidential run rose, but such comments alienated his base.

Indeed, the KMT has increasingly leaned into political attacks, casting doubt on the reliability of the U.S. as an ally against China. U.S.-skeptic views are likely to continue to hold sway as a refrain of the pan-Blue (KMT-aligned) camp going forward. Even if Lai can coast on the Tsai administration’s accomplishments in this regard, this will not be a magic bullet for him that shores him up electorally.

Indeed, though Lai had a decisive lead over his opponents in the election, it is also clear that he had a weak position relative to Tsai Ing-wen’s in 2020, when she won reelection by historically large margins. If the pan-Blue camp had managed a joint ticket against him, he would almost certainly have been defeated.

Questions are already being asked about whom the KMT will field against him in 2028 and whether pan-Blue political parties will manage to unite against the DPP. Or if pan-Blue parties will split over the question of whether to engage in scorched earth tactics versus selective opposition to the DPP on an issue-by-issue basis. But even if the present may be a time for moderation on his part, eventually Lai will need a compelling political narrative of his own if he hopes to maintain power beyond just one term. Coasting off of the Tsai administration’s laurels will not suffice for this.

China-Taiwan ties have already gotten off to a rocky start following Taiwan’s election, before William Lai’s term has even begun. On January 15, Nauru, one of just 13 countries that still had formal diplomatic ties with Taiwan, switched diplomatic recognition to the People’s Republic of China (PRC). It’s an indication that China will continue to take a hard line on Taiwan and maybe even escalate matters this year. I believe that as long as the Democratic Progressive Party’s (DPP’s) Lai does not accept the 1992 Consensus (which states that China and Taiwan are part of the same country), which Beijing demands as a requirement for talks, then cross-Strait ties will not improve and direct high-level dialogue will continue to be absent, as it has been under Tsai Ing-wen, who also rejects the 1992 Consensus. Tsai and her cabinet’s insistence that she would be willing to talk to Beijing without any preconditions and as an equal is impractical since if Beijing were willing to do so, then Taiwan obviously would not be in the complicated geopolitical situation it has been in for more than seven decades. After eight years of no high-level interaction between China and Taiwan, I don’t think it is feasible for this to continue for another four years.

As such, Lai will need to weigh whether he is willing to let this continue or compromise and acknowledge the “consensus” for the sake of improving ties and hence Taiwan’s national security. He should avoid trying to declare formal independence or making any sort of moves to achieve that, which both Beijing and Washington would not take too kindly.

The Tsai government has not done a very good job of managing the fallout of declining relations with China. The security situation is worsening, as Beijing increasingly flies planes and sails ships close to Taiwan, and efforts to resume dialogue have not been successful.

The U.S. needs to be more aware of what Taiwan’s military and societal capabilities are, realistically, in terms of national defense, while ensuring that the safety of Taiwan’s people remains the top priority. In addition to government constraints, Taiwanese society is still wary of and even reluctant to tolerate increased militarization for national defense. Washington needs to avoid taking steps that may escalate cross-Strait tensions and not benefit Taiwan in concrete ways, such as Nancy Pelosi’s visit in August 2022. While welcomed by Tsai and some Taiwanese, the visit led to China’s launching several days of PLA exercises around Taiwan as well as routinely flying past the Taiwan Strait median line.

The increase of Taiwan’s male conscription period from four months to one year starting this year was criticized by some and was not popular among young people, which is why the Tsai government mandated that one-year conscription only applies to males born after 2004. Meanwhile, reservist training was supposedly increased from one week to two weeks in 2021, but this only applied to a small number of reservists, less than 20 percent.