The January 16 Taiwan elections were the latest evidence of a new reality in Asia: Taiwan’s cross-strait neighbor, China, is in significant decline. Replacing a government that made integration with China its chief priority, incoming Taiwan president Tsai Ing-wen asked for and received a mandate to reform her island nation’s economy, precisely because the close links established by her predecessor have been dragging down the island nation as the depths of China’s economic challenges become obvious.
During the Great Recession, the belief among analysts, economists, and corporate leaders in the advanced economies was that China was the engine that would pull the world through. China’s sharply increasing inflationary policies did give some lift to the region, but one need only look at Taiwan’s sharp decline in economic growth over the past year to see that, as China’s economy has slowed under the weight of public debt that increased dramatically during and since the crisis, the situation has turned around: China’s slowdown imperils global growth, something that is immediately evident in Taiwan.
Tsai’s victory was complete, and there should be no doubt that the voters intended to send a clear message. In a three-way race, she carried 56 percent of the vote. She had coattails, too. Her Democratic People’s party earned its first majority in Taiwan’s parliament, the unicameral Legislative Yuan, gaining 28 seats to win 68 of 113 seats overall. Her predecessor’s party, long seen as the most accommodating to Beijing, lost 29 seats in a rout.
What is the message? Tsai’s DPP has been painted by Beijing — and many China analysts in the U.S. and elsewhere — as a pro-independence party. While Taiwan’s last (and only other) DPP president, Chen Shui-bian, was considered suspect by the U.S. for his pro-independence leanings, that is not Tsai’s message or mandate.
