Taiwan’s Tumultuous Election Campaign

Campaign flags in Taipei, 2002

The President considers martial law, the Minister of Defense talks of the army taking over Taipei and the opposition party warns of a possible assassination attempt against a candidate.

With three months to go before national elections, Taiwan’s presidential campaign is as intense as that in the United States and even more bitter, as issues of war, peace and national survival are at stake, while an aggressive media helps create an atmosphere of heated confrontation.

On December 18, the opposition Kuomintang, sensing possible victory after eight years of dominance by the Democratic People’s Party, presented a list of “dirty” tactics it said the DPP might use, including the assassination of one of the two major candidates as a way to postpone the election.

On Dec. 18 Taipei police arrested a former official of the prosecutor’s office who sent threatening letters with bullets in the envelopes to several politicians, including President Chen Shui-bian and Frank Hsieh, the DPP presidential candidate.

In late November, Chen said that he was considering declaring martial law because the opposition was refusing to obey election regulations – and 12 hours later he withdrew the idea.

In this feverish atmosphere, the proceedings are being closely watched by Beijing, Washington and Tokyo, each with its own preferred agenda.

Opinion polls give Kuomintang candidate Ma Ying-jeou a comfortable lead over Hsieh. Ma is presenting himself as the sensible alternative to the eight years of DPP rule, during which time relations with Beijing have greatly deteriorated, thousands of Taiwan firms, including those in the key high-technology sector, have moved to China and the island has become increasingly isolated diplomatically.

In the latest example, Shanghai this week announced its plan for the 2010 World Expo. With the participation of 184 countries, Taiwan is relegated to 800 just square meters, against 1,000 each for Hong Kong and Macau, in the 20,000-square-metre China pavilion. There was no consultation with the Taiwan side on space allocation.

Ma is also exploiting disgust at alleged corruption involving Chen’s family and associates and the president’s increasingly erratic behavior. Curiously, charges earlier this year that Ma himself maintains an illegal slush seem to have had no particular impact on voters.

Hsieh is presenting himself as a more pragmatic and cautious version of Chen and someone better able to deal with Beijing. To win, he must broaden his appeal beyond the 20 percent of voters who say they want a declaration of independence and convince those in the center that he can do a better job of managing Taiwan’s delicate place in the world than the KMT. He presents Ma as a mainlander who might make a bad deal with Beijing.

The DPP supports eventual independence, while the KMT is in favor of the status quo and talks with China under the so-called 1992 consensus, under which both sides agree that the mainland and Taiwan belong to one China, while they interpret the meaning of that differently.

Both candidates have promised to soften Chen’s hard line toward China in the economic field. Ma says he will end the ban on direct air, shipping and postal links that began in 1949, relax a cap that limits investment by Taiwan firms in the mainland to 40 percent of net assets and allow 3,000 mainland tourists a day into Taiwan and increase the number three-fold over time.

At the Foreign Correspondents Club in Tokyo on Tuesday, Hsieh said that he also would relax the investment ceiling on a case-by-case basis. “China is a market that Taiwan firms cannot ignore. The government will help firms like Taiwan Semiconductor Manufacturing Company win over the market. But we do not encourage them to raise money in Taiwan and move to China.”

Hsieh said he will also allow direct charter flights and the entry of more mainland tourists.

But these measures are too little, too late for the thousands of Taiwan firms that have long called for the lifting of all limits on business with China. According to mainland figures, Taiwan firms have invested US$45 billion in 74,000 ventures in China. Unofficial estimates put the figure at US$100 billion, with money routed via Hong Kong, the Cayman Islands and the British Virgin Islands, making Taiwan the mainland’s largest foreign investor.

Unable to raise money in Taiwan and remain below the 40 percent ceiling, they turn to other markets, as did Uni-President China Holdings, the mainland arm of Taiwan’s largest food and beverage conglomerate, which raised US$477 million in an IPO in Hong Kong on Monday. It will use the money to expand production of juices and instant noodles in China.

But Hsieh won’t stray too far from the DPP line. “Our party emphasizes national security issues and Taiwan’s identity over economic issues. We are unlike Hong Kong,” he said in Japan.

In a speech at Kyoto university, the alma mater of former Taiwan president Lee Teng-hui, Hsieh said that he was “not a Chinese but a pure Taiwanese.” During his trip, he often used Japanese in public, which would be unthinkable for a mainlander leader, even one fluent in the language.

For his part, Ma is playing the economic card. He chose as his running mate Vincent Siew, 68, a former prime minister and minister of economic affairs. His theme is that, under Chen, Taiwan’s economy has been marginalized.

“We have to find our niche. We are an island economy and must work with the outside world or become isolated. In the election, people stress local themes and talk of things at home. This is against the laws of economics,” Siew said.

He promised long-term policy support for the creativity that is the strength of Taiwan, to improve its competitiveness in both agriculture and industry.