Opinion: Two key questions hang over Taiwan’s election

Editor’s Note: Lanhee J. Chen, PhD, is a regular contributor to CNN Opinion and the David and Diane Steffy Fellow in American Public Policy Studies and a participant in the Project on Taiwan in the Indo-Pacific at the Hoover Institution. He was a candidate for California State Controller in 2022. Chen has played senior roles in both Republican and Democratic presidential administrations and been an adviser to four presidential campaigns, including as policy director of Romney-Ryan 2012. The views expressed in this commentary are his own. View more opinion on CNN.

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Voters in Taiwan will go to the polls this Saturday to elect a new president in the first significant election of 2024 — a year when voters in over 60 countries and territories comprising roughly half the world’s population will cast ballots.

This will be only the eighth direct presidential election in Taiwan’s history. And while incumbent president Tsai Ing-wen cannot run again due to term limits, this could mark the first time that the incumbent political party (in this case, Tsai’s Democratic Progressive Party or DPP) wins a third consecutive term.

The island’s election is particularly consequential given its pivotal role in the ongoing geopolitical tension between the United States and China. Observers in both countries will be watching the results closely, in no small part because the outcome will have an impact on the geopolitics of the region and beyond.

China’s Communist leaders have traditionally viewed Taiwan as a renegade province, even though it has been self-governing for decades. In fact, Chinese leader Xi Jinping recently conveyed his view that Taiwan’s reunification with China is an “inevitability.”

Taiwan’s presidential contest includes three candidates: Lai Ching-te (also known as William Lai), the sitting vice president and a member of the ruling DPP; Hou Yu-ih, of the Nationalist Party, or Kuomingtang (KMT), and mayor of New Taipei City, the island’s most populous city; and Ko Wen-je, a former mayor of Taipei and standard-bearer for the Taiwan People’s Party (TPP), which is looking to become the first “third” party to win a presidential election there.

Major public opinion polling — which is not permitted to be published during the last ten days leading up to Saturday’s vote — showed the DPP’s Lai with a steady, but narrow lead, over the KMT’s Hou. Amid the polling blackout, it’s unclear how secure that lead is in the final stretch of the race.

Here are two key questions that shine some light on how Taiwan’s elections will be decided: 

Cross-Strait or pocketbook? 

Taiwan was an exemplar of success during the Covid-19 pandemic and immediately thereafter; from its epidemic control measures to relative macroeconomic strength during a period of economic turbulence around the world.

But starting in mid-2022, economic growth and investment in Taiwan slowed and the island began 2023 in recession. Other economic measures — particularly those that hit pocketbooks of people on the island — were also troubling, including inflationary price increases for food and services and weak wage gains relative to that inflation.

These challenges have led to dour assessments of the incumbent administration’s handling of the economy and created an opening for both rival parties to attack the DPP and Lai, its presidential nominee.

Lai, for his part, has promised to jumpstart economic growth. The KMT, meanwhile, has pledged closer economic ties to Beijing in an effort to boost Taiwan’s economy, while the third-party TPP has focused on “evidence-based policymaking” that includes developing renewable energy, fostering innovation and small business promotion and seeking inclusion in regional free trade pacts.

But Taiwanese presidential elections have traditionally hinged on cross-strait relations and the relative positioning of the two major parties on relations with the mainland.

Lai, the DPP candidate, has pledged to maintain Taiwan’s self-governing status and close relations with the US, while recently reflecting an openness to “engagement with Beijing under the principles of equality and dignity.”

Elsewhere, the Nationalist Party has long advocated for warmer ties with the mainland and has accused the DPP of pushing Taiwan toward war with its neighbor. The KMT’s Hou has presented himself as a dealmaker who would ensure stability across the Taiwan Strait and has called this election a referendum between “war and peace.”

Meanwhile, Ko and the third-party TPP have tried to stake out a middle ground, calling for “more rational cross-strait exchanges” while at the same time emphasizing the maintenance of Taiwan’s democratic system and strong relationship with the US.

Whether the election hinges on pocketbook or cross-strait issues will go a long way to determining who ends up winning.

The DPP position on cross-strait relations better mirrors where recent polling suggests the Taiwan electorate is – increasingly identifying as “Taiwanese” with an interest in inching closer toward true (rather than de facto) independence for the island.

But if the electorate instead wants to send a message to the ruling DPP about its uneven handling of the economy, and deprioritize the importance of cross-strait relations, an upset could occur on Saturday.

Will young voters put a third party over the top? 

While independent and minor party candidates are nothing new in Taiwanese politics, this year’s election is the first in about two decades where a candidate not from either of the island’s two major parties — the DPP and KMT — is truly competitive in the election.

Some Taiwan residents, particularly younger voters, have expressed frustration about the constraints of the two-party system and the incessant focus of both major parties on cross-strait issues, rather than the pocketbook issues that have more traditionally dominated elections in the US, for example.

Younger Taiwanese have had to deal with stagnant wages and high housing costs, which have limited prospects of upward mobility. Third-party candidate Ko Wen-je of the Taiwan’s People Party has tried to capitalize on this political opening by framing himself as an outsider who can address the island’s economic challenges.

Ko also named an American-educated, 45-year-old political newcomer named Cynthia Wu as his vice presidential candidate to enhance his appeal with younger voters, who have been called the “wild card” in this year’s election.

Many younger voters have traditionally favored the DPP, given its more progressive orientation on social issues, but have become frustrated with the party’s focus on cross-strait relations. And the KMT’s position on cross-strait issues is seen as out of step with how many younger Taiwan voters view the current geopolitical situation.

Thus, the TPP’s policy pragmatism and focus on economic issues has drawn support from younger voters away from the DPP and put it squarely in the conversation surrounding this year’s election.

Even if the TPP doesn’t win the presidency, it could win enough seats in the legislature to be a significant factor in policymaking on the island in the coming years. The DPP is unlikely to win a majority of seats in the legislature, according to current projections.

Or, the TPP could team up with the KMT — as was unsuccessfully attempted during the presidential contest — to form a governing coalition in the legislature that would be a check on a potential Lai presidency.

Biden administration officials and Republicans in Congress have avoided publicly taking sides in the election, but the DPP is highly regarded in Washington and has built relationships there by virtue of being in power for the last eight years.

While a DPP win would continue to draw Taiwan closer to the US, a KMT victory could provide a temporary reprieve to tensions in the Taiwan Strait – something that senior US officials may quietly appreciate.