On January 13, up to 19.5 million people in Taiwan will vote for the territory’s new president and vice-president. Voters will also determine the makeup of Taiwan’s 113-seat Legislative Yuan by voting for their local legislator as well as their favored political party. Seventy six seats in the Yuan will be occupied by local legislators with a further six seats reserved for indigenous candidates and another 34 seats allocated based on the proportion of votes received by political parties.
Apart from the proportion-based seats in the Yuan, the results of both the presidential and legislative elections will be determined via a first-past-the-post system, meaning that the candidate who receives the greatest number of votes will win the election regardless of their share of the popular vote. All elected representatives will serve four-year terms. The polls are set to open at 08:00 local time on January 13 with results widely expected by the night of the same day.
Taiwan polls suggest DPP to retain presidency by slim margin
A median of 10 polls conducted on January 2 indicates that that the incumbent Democratic Progressive Party (DPP) currently holds a narrow lead in the presidential polls. The DPP’s candidate for president, current vice-president William Lai Ching-Te, has a median support rate of around 35.5%, a 4.5% lead over the main opposition candidate Hou You Yi of the Kuomintang (KMT). Taipei City mayor Ko Wen-je of the Taiwan People’s Party (TPP) is in third place with a median of 22% across the conducted polls. Around 15% of voters are reportedly undecided and could sway the election results if they overwhelmingly back one opposition candidate instead of the DPP.
In contrast to the presidential election, the race for the Legislative Yuan continues to be unfavorable for the DPP with polls suggesting that the incumbent party is set to lose its four-seat majority in the legislature. The DPP’s share of seats in the Yuan is likely to fall from 61 seats to an estimated 44-48 seats with most of the lost seats expected to go to the KMT.
The KMT is likely to become the largest party in the Yuan with around 50-55 seats, and there remains the possibility that the party could obtain a simple majority in the legislature by winning 57 seats. However, current polls indicate that no political party is expected to obtain enough seats to win a simple majority in the Yuan. The TPP is expected to win between 10-12 seats in the legislature and could play the role of kingmaker on many issues throughout the next legislative term as the party is unlikely to form a permanent alliance with either the DPP or KMT.
DPP win will worsen cross-strait trade relationship
Cross-strait relations between Taiwan and China will be negatively impacted should the DPP manage to retain the presidency in the upcoming elections due to the party’s pro-independence leanings. The DPP has attempted to moderate their traditional pro-independence stance for the elections but officials in Beijing are unlikely to change their view of the party as current presidential candidate William Lai is widely known to have held pro-independence views in the past.
The DPP’s vice presidential candidate, Hsiao Bi-khim, has also been sanctioned by mainland China for her support for Taiwanese independence. Her previous role as Taiwan’s unofficial representative to the United States could signal that the DPP intends to maintain close ties with the U.S.
Beijing would likely continue to refuse all national-level dialogue with Taiwan in the event of a DPP presidential victory and China could also choose to signal its disapproval with the outcome of the election by launching military exercises in and around the Taiwan Strait. China could also respond to a DPP win by increasing regulatory and trade pressure on Taiwanese exports and companies operating in mainland China. Beijing commonly employs controls on food and consumer goods from Taiwan as a means of placing political pressure on the island.
On the other hand, an upset win by the KMT in the presidential elections could lower cross-strait tensions as mainland China has openly signaled its preference for the KMT over the DPP. The KMT have traditionally been seen as a mainland-friendly party and are the only major political party in Taiwan to still maintain the 1992 Consensus agreement that there is only one China. The KMT has also indicated that it would be willing to resume dialogue with China on other issues such as Cross-Strait Service Trade Agreement (CSSTA) which would allow the opening of select service sectors to mainland Chinese investment.
China has employed a variety of tactics to influence the results of the upcoming elections against the DPP and for the KMT. For example, Chinese officials have used a KMT election slogan describing the upcoming poll as a “choice between peace and war” and the head of Beijing’s Taiwan Affairs Office has indicated that the mainland would be willing to resume dialogue with the island should the KMT win the upcoming presidential election.
The results of the legislative elections will also influence China-Taiwan relations as Taiwan’s future president will still need the support of the Yuan to table and pass bills. A win by the KMT in the legislature could help moderate China-Taiwan ties in the event of a DPP presidential victory as a mainland-leaning legislature would make it more difficult for a future DPP president to pass bills or trade restrictions that could prompt a strong negative response from China. Additionally, a KMT-led legislature could help ease cross strait tensions between China and Taiwan in by acting as an alternative channel of dialogue with Beijing. Similarly, the Yuan is still expected to favor closer ties with China even if the KMT fails to obtain a majority in the legislature as the TPP is expected to align more closely with the KMT on cross-strait issues.
Trade restrictions continue to impact multiple sectors
U.S.-led restrictions on advanced semiconductors continue to impact China’s chip sector. Rising trade competition between the U.S. and China could also impact the renewables and electronics sectors as the U.S. is reportedly considering raising its existing 25% tariff on Chinese electric vehicles, EV battery packs and Chinese solar products. Such potential tariffs could hurt Chinese makers of EV batteries.
China continues to respond to U.S.-led trade restrictions with its own export controls. On December 21, Chinese authorities announced an export ban on certain technologies used to make rare earth magnets, adding to existing restrictions on rare earth metals including gallium, germanium, and graphite. The new ban will restrict technology exports for the manufacture of rare earth magnets and other products including rare-earth calcium oxyborate. Additionally, China also announced on January 7 that it would sanction five U.S.-based aerospace and military manufacturers over arms sales to Taiwan, a move that is likely linked to the upcoming Taiwan elections.
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