It was the economy, stupid

In choosing a new president, Taiwanese voters focused more on their pocketbooks than fears of Chinese dominance

Jonathan Adams

Newsweek Web Exclusive, March 23, 2008

In its fourth presidential election Saturday, Taiwan voted overwhelmingly for the candidate backing warmer China ties, potentially ushering in a new era of moderation after eight years of Chen Shui-bian's confrontational approach.

In the end, the Kuomintang's Ma Ying-jeou successfully sold himself as the candidate for change, as opposed to four more years of the status quo under Chen's pro-independence Democratic Progressive Party.

Voters embraced widespread expectations that Ma can revive the island's stagnant economy, while rejecting DPP rival Frank Hsieh's scare tactics and negative attacks.

Speaking at a press conference after his victory, Ma said voters had given him a mandate to improve ties with China. But he made clear he would not compromise on Taiwan's sovereignty.

"Taiwan should be more open and more pragmatic; we should not isolate ourselves," said Ma. "Freedom and democracy are our most valued possessions—we will defend them with our lives."

China considers self-ruled Taiwan a part of its territory that must eventually return, by force if necessary.

Ma's landslide victory (58 percent to his rival's 42percent in a vote with high turnout) surprised analysts who expected a closer race. The result showed that for Taiwanese voters, the economy trumped national identity—the issue that had been decisive in previous elections.

Ma is a Hong Kong-born Mainlander, and some thought that could cripple his chances amid surging Taiwan-first pride. (Under the KMT's one-party rule, a Mainlander minority that arrived in the late 1940s long ruled over a native Taiwanese majority.)

"People think the economy is most important," said analyst George Tsai. "Identity or ethnic difference aren't important enough now to prevent a Mainlander from being elected. And that's a healthy trend for Taiwan's democracy."

Taiwan's economy is strong on some indicators, such as exports and GDP (5.7 percent this past year). But Taiwanese complain of stagnant wages, inflation and fewer job opportunities. They say strong growth is only benefitting a few in the island's high-tech and other sectors, and not trickling down to the lower and middle class. It's popular in Taiwan to refer to an"M-shaped" society, in which inequality has widened and the middle class shrunk.

Amid those economic woes, many saw Hsieh's DPP ignoring bread-and-butter issues while instead prioritizing identity politics and needless confrontation with China.

At a Ma appearance in Taipei, Luo She-mei, 38, said she'd voted for Chen's DPP in 2000, but this time would vote for Ma. "Our salaries haven't gone up, and there are fewer jobs," said Luo. "I think there should be a change of parties—we should give the KMT an opportunity."

Ma's economic plan promises Taiwanese relief. It features ambitious economic openings to China, including more Chinese tourists and investment allowed into Taiwan, and direct cross-strait flights. He even envisions a possible cross-strait common market.

In the last weeks of the campaign, Hsieh tried to scare voters on that issue, saying that what he termed Ma's "one-China market" could lead to a flood of Chinese laborers and cheap, poor-quality Chinese products into Taiwan. Voters didn't buy that—in part because Ma insisted he would not allow in Chinese laborers or agricultural products.

Meanwhile, Ma enjoys widespread admiration for what supporters say is a clean, upright character. That was a key selling point after corruption scandals that have dogged the ruling DPP in recent years.

Though himself a product of the KMT authoritarian machine that ruled Taiwan for more than 50 years, his supporters insist he now represents a "new KMT." Ma is committed to democracy and it's impossible for the party to return to its corrupt, authoritarian past, they say. "Today's KMT isn't the same," said Lin Jing-chong, 53, after voting for Ma in a Taipei suburb. "And if Ma doesn't do a good job, we'll change again in four years."

Ma has reassured pro-independence or pro-status quo Taiwanese by ruling out unification with China, and by saying Taiwan's fate must be decided only by its 23 million people. He won over some native Taiwanese by spending months with Southerners in the lead-up to the election—staying overnight in their homes, and joining them on their farms and fishing boats.

His recent criticism of Chinese Premier Wen Jiabao suggested his stance on Taiwan sovereignty would be firm. Wen belittled Taiwan's status in comments Tuesday, saying Tibet and Taiwan were both parts of China, and that the 1.3 billion Chinese and 23 million Taiwanese should jointly decide Taiwan's fate. Ma called Wen's comments "irrational, arrogant and foolish," and said he wouldn't rule out a boycott of the Beijing Olympics this summer if the situation in Tibet deteriorated further.

Such talk could be a preview of how he's likely to deal with China in the next four years. On economics, analysts say he'll be able to move quickly on his agenda. (Although it's not clear he has a sufficient cure for what ails Taiwan—particularly if a U.S. recession hits the export-dependent island hard.) But on cross-strait politics, the going will be even rougher.

Ma has often criticized China, saying it should apologize for the 1989 Tiananmen massacre, and that it should remove the 1,000 missiles pointed at Taiwan before peace talks could start. He spoke out against China's 2005 passage of the "Anti-secession Law," which codified its threat to attack Taiwan if the island makes its de facto independence permanent. He was subsequently denied a visa to visit his native Hong Kong.

Based on that record, analysts say that while cross-strait talks could resume under Ma, the likelihood of a political breakthrough remains slim. "Economic linkages will bind the two sides together," said analyst Tsai. "But politically, they're drifting apart."

For their part, most Taiwan voters are focused on livelihoods, not grand peace deals. Coming out of a voting booth Saturday, Du Tie-lou, 31, had a simple rationale for supporting Ma. "I think if Ma's president, it will be easier for laobaixing [common people] to make a living," said Du, his mouth stained red from the betel nut popular with Taiwan's working class. "He'll be better for the economy."

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