The KMT losing out in the election is not unexpected. Past protests against the then currently ruling KMT had pointed out the decline of Ma's approval rate to a measly 9.2%. He also probably did not make himself any more popular by holding talks with China in November 2015, breaking his promise never to talk with China. Interestingly, these talks were reported in a positive light by Western media, although the move was possibly political suicide.
But the shift in power that's as dramatic as the one we've seen unfold yesterday, leads one to wonder what will happen from now on. There are still many questions that cannot be answered, but it is possible to make an educated guess at some topics that might see a bit of a change.
Firstly, and perhaps most importantly, Taiwan's defence policy. The KMT has long held back big spending on active defence. The DPP thinks differently, aiming to increase defence spending (which would please their military partners the US) and take a more defiant stance with regards to China. More on this latter topic is to come later. After all, Taiwan is almost constantly under threat or implicit threat of being invaded. It will be interesting to see whether Tsai is willing to sacrifice funds to dedicate to defence, where the KMT was not.
Tied to this is the economy. In Clinton's 1992 campaign against Bush senior, "The economy, stupid!" had been coined to indicate the importance of economic policy in elections. Indeed, how much money people have to spend and how much they will have to spend in the future is a factor that gains or loses you votes. Interestingly, however, the Taiwanese economy has been rather weak lately. According to Bloomberg, Taiwan faces considerable risk of recession (source: http://www.bloomberg.com/news/articles/2016-01-11/meet-2016-s-worst-economic-performers-flirting-with-disaster). A major factor in this trend is the economic downturn of China itself. It is rather difficult to predict what changes the new government might cause economically. If they are to cooperate less with China economically, this might mean lower exports, hurting the economy. On the other hand, a cooling down of the economic cooperation with China might cause Taiwan to not be dragged down as much by the Chinese downturn. But I can definitely imagine the economy being a difficult point, on which Tsai is going to have significant troubles keeping afloat. Wherever the Taiwanese economy is headed, it is a difficult matter, and for now we'll have to wait and see what happens.
Finally, there is the diplomatic elephant in the room. Taiwanese independence. Interestingly, the younger generation seems to be more enthusiastic about independence than the older people. It is therefore unlikely that Taiwan will declare their independence tomorrow; on top of that it would simply antagonise China too much. A complete escalation would be disastrous. But Tsai might very well not adhere to the 1992 Consensus (more on it in my previous post). After all, it was agreed upon by KMT, whose views on the independence/reunification matter clash with those of the DPP. Should the 1992 Consensus be rejected by Taiwan, the problems I spoke about in my earlier post on the One China policy grow even larger. To restate in one sentence, without the 1992 Consensus to rely on, the policy loses its validity.
In short, there are three major points of interest as the balance of power has changed in Taiwan: military, economy, and diplomacy. As I have indicated before, I think we have stood by idly for long enough. The time might soon come for the rest of the world to ensure Taiwan does not stand alone. It has shown to be a brilliant young democracy in a hostile environment. If we think it's worth fighting for democracy, then standing together with Taiwan in the future may be something to consider.
A few recommendations for further reading:
http://warontherocks.com/2016/01/the-cost-of-credible-deterrence-in-taiwan/
http://www.straitstimes.com/asia/east-asia/taiwans-circle-of-friends-may-get-smaller
http://www.taipeitimes.com/News/front/archives/2016/01/17/2003637385
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