Democratic Progressive Party (DPP) Chairperson Tsai Ing-wen was elected president on Jan. 16 by a decisive margin, and for the first time the DPP won a majority in the Legislative Yuan (LY) election. This outcome has set Taiwan on a new course. Since then, Tsai has adhered to her pledge to maintain the status quo and peace in the Taiwan Strait and has taken steps to continue reaching out to Beijing. Beijing reacted calmly to the election and has repeatedly said the election will not change the basic framework of its peaceful development policy toward Taiwan. However, Beijing is waging a focused campaign to press Tsai to accept the 1992 Consensus in her inaugural address on May 20. Even if she does not fully meet Beijing’s demands, as is expected, it will be in the interest of both sides to avoid confrontation after May 20 in what is likely to be a strained relationship.

DPP wins big

Tsai Ing-wen won the presidential election with 56.1 percent of the vote, and the DPP claimed 68 of 113 seats in the LY. The Kuomintang (KMT) presidential candidate, Eric Chu Li-lun, who replaced unpopular candidate Hung Hsiu-chu in October, won 31 percent of the vote, and People First Party (PFP) candidate James Soong Chu-yu won 12.8 percent. The KMT managed only 35 seats in the legislature – a decrease of 29 from the 2012 election – while the PFP won three seats; the newly established New Power Party (NPP) won five seats. The new LY session began on Feb. 19, and the presidential inauguration takes place on May 20.

In a brief speech after her victory, President-elect Tsai reaffirmed her campaign pledges to maintain the status quo and peace and stability across the Taiwan Strait. She repeated references to the Republic of China (ROC) constitutional order and cross-strait negotiations, interactions, and exchanges, and described the will of the Taiwanese people as the foundation for future cross-strait relations. She emphasized that “both sides of the strait have a responsibility to find mutually acceptable means of interaction that are based on dignity and reciprocity” and warned that “any forms of suppression will harm the stability of cross-strait relations.”

Tsai’s cross-strait policy

Tsai’s focus since the election has been on policies to reinvigorate the Taiwan economy and on social issues, government organization, transitional justice, and political reforms.  She has said that she seeks to expand trade relations with South and Southeast Asia, and consistently expressed hopes for goodwill, peace, stability, and communication across the Taiwan Strait.

In her victory speech Tsai did not repeat a reference she made in a late December debate to a “mutual understanding” that the two sides had reached in Hong Kong in 1992 (an important comment that could be interpreted as referring to the 1992 Consensus). However, in an interview published in the Liberty Times on Jan. 21, Tsai said she “understands and respects” the “historical fact” that discussions took place in 1992 and that the Straits Exchange Foundation (SEF) and the Association for Relations across the Taiwan Straits (ARATS) had “achieved several common acknowledgements and understandings (達成了若干的共同認知與諒解).” She elaborated that these understandings together with the ROC constitutional order, the results of 20 years of negotiations and exchanges, and the democratic principles and will of the Taiwan people comprise the “established political basis” for peace, stability, and development in cross-strait relations. These comments represent further attempts by Tsai to reach out and reassure Beijing that she seeks a positive relationship. Nevertheless, commentators in Beijing have said they do not meet Beijing’s demands that she explicitly accept the 1992 Consensus and its core connotation of “one China.”

President-elect Tsai’s appointments to senior positions in her administration also indicate her desire for stability. Lin Chuan, an economist who was Chen Shui-bian’s minister of finance for three years, was named premier on March 16. Though not a DPP member himself, in January 2014 Lin led a delegation of DPP members who are close to Tsai to the mainland for meetings on trade and economic issues. On April 15, several more appointments were announced, including that of career diplomat Katharine Chang Siao-Yue as minister of the Mainland Affairs Council (MAC). Chang is currently a senior official in Taiwan’s relations with the United States, and held several posts during the Ma administration. David Lee Ta-wei, another career diplomat who was representative to the US during the Chen administration and representative to Canada during the Ma administration, was named foreign minister. Joseph Wu Jau-shieh, who as chairman of the MAC under Chen Shui-bian oversaw the initial agreement for cross-strait charter flights and later served as representative to the US, was named secretary general of the National Security Council. All these appointees are moderates who will likely work effectively to help Tsai implement her cross-strait objectives.  As of late April, Tsai has not announced the appointee for chair of the SEF.

Joseph Wu visited Washington immediately after the election. In a public speech on Jan. 19, he made clear that the Tsai administration’s priority will be economic development and noted that the DPP’s victory should not be construed as a defeat for China. He said that Tsai advocates a return to the original spirit of setting aside differences to seek common grounds that formed the basis of the 1992 cross-Strait meetings. Wu said Taipei will do its utmost to find a “mutually acceptable mode of interaction between Taiwan and the Mainland.” He indicated the DPP does not oppose many of the initiatives begun under the Ma government, such as the Services Trade Agreement (STA), Merchandise Trade Agreement (MTA), and the establishment of representative offices, but that the Tsai administration will seek to be more transparent and that legislation establishing an oversight mechanism is a required first step.

On Feb. 18, DPP legislative caucus leader Ker Chien-ming announced that the caucus would re-write the draft of the oversight bill that it had submitted in the previous legislature, when it was in the minority.  The new draft, released on April 1 and titled the “Statute Governing Oversight of the Concluding of Cross-Strait Agreements,” changes the terms “Taiwan” and “China” to “Taiwan Area” and “Mainland Area,” in accordance with the ROC constitutional framework for cross-strait relations, and would not use the term “treaties” to describe cross-strait agreements. Substantively, it requires the Executive Yuan to present plans to the LY before negotiations begin, report to the LY during negotiations and obtain LY permission to continue, and present completed agreements to the LY for clause-by-clause review. The legislature would have the right to call public hearings, and negotiations and agreements would be reviewed for national security implications. The bill would not apply retroactively to agreements reached by previous administrations though the LY would vote on the STA, and MTA negotiations and ratification would take place, under this bill.

A party statement said that the bill was drafted to “avoid controversy” and Ker Chien-ming indicated that the draft conveys President-elect Tsai’s preferences. Still, there is some resistance in the DPP and especially in the NPP. Reflecting its roots in the 2014 Sunflower movement, the NPP would change the references to Taiwan and the mainland, would require greater participation by NGOs in the review process, and would allow for amendments and additional terms after agreements are signed. That Tsai has been able to win support for this revised approach in the face of considerable resistance from pro-independence voices is an encouraging sign of her ability to maintain support for her stated cross-strait policies.

There will be other challenges to Tsai’s cross-strait policy from within the pan-green camp. On Feb. 20, for example, DPP Legislator Gao Jyh-peng suggested he would introduce legislation that would remove the requirement to display Sun Yat-sen’s portrait in public buildings; this caused the TAO to warn that de-sinicization would upset the status quo. Tsai did not comment directly, but said that the Executive Yuan will create a committee to promote transitional justice, and that true reconciliation and solidarity in society are the goals of the process. In March, DPP legislators proposed laws limiting rights of former ROC presidents and vice presidents to travel to China, and cited budget concerns in forcing the cancellation of a planned visit to China by outgoing SEF Chairman Lin Join-sane. In April, an LY committee voted to revoke a ban on ROC citizens placing “Republic of Taiwan” stickers on the cover of their passports.

Beijing’s policy response

Although Tsai and the DPP won a more decisive victory than expected, Beijing reacted calmly to the election outcome. The TAO merely noted the election and said it would not change Beijing’s policy. Privately, officials expressed remarkable confidence that their basic policy of pursuing the peaceful development of relations based on the 1992 Consensus was the correct policy.  Tsai Ing-wen’s Jan. 21 interview with Liberty Times probably contributed to the sense of calm in Beijing and raised some hope for Beijing that Tsai might be pressed into moving even further toward explicit acceptance of the 1992 Consensus. Taiwan experts close to policy makers commented that Tsai’s remarks contained some positive points.

Six weeks later, General Secretary Xi Jinping put his authority behind these views in discussing Taiwan with delegates to the National People’s Congress (NPC). Xi said, “Our policy towards Taiwan is correct and consistent, and will not change because of a change in the Taiwan authorities.” In remarks perhaps specifically meant for Tsai, he continued, “If the historical fact of the ‘1992 consensus’ is recognized and if its core connotation is acknowledged, then the two sides of the Strait will have a common political basis and positive interaction can be preserved.” Xi did not repeat his earlier warnings that, if this did not happen, cross-strait relations might capsize. Since then, Beijing’s statements and actions can be described as a focused campaign to press Tsai to accept these points in her May 20 inaugural address.

On the one hand, officials at all levels including Politburo Standing Committee (PBSC) member Yu Zhengsheng, TAO Minister Zhang Zhijun, ARATS Chairman Chen Deming, the official media, and invited scholars have repeatedly mentioned the importance of Tsai’s accepting the 1992 Consensus and its core connotation. To back this up, Beijing has taken steps to put pressure on Tsai by indicating the potential costs of not meeting its demands. On March 17, it established diplomatic relations with the Gambia. As the Gambia had broken diplomatic relations with Taipei three years earlier, Beijing’s action did not reduce the number of Taipei’s allies. Nevertheless, the move was interpreted in Taipei as a warning of what Beijing might do in the future. Also in March, Beijing allowed a contract with a fish cooperative in Tainan for the purchase of milkfish to lapse. By April, it became clear that the number of PRC tourist arrivals was declining for the first time. In early April, the Tourism Bureau made public that in the last week of March and first week of April PRC group tour arrivals were down 30 percent and individual arrivals down 15 percent because Beijing had reduced the tourist passes issued for Taiwan. These were clear reminders of Beijing’s economic leverage.

Last summer before Tsai’s June visit to Washington, there were rumors of some back-channel contact between Beijing and the DPP. These were denied by Beijing. It would be consistent with Chinese political culture for Beijing’s current campaign to be accompanied by unacknowledged back-channel efforts to probe Tsai’s willingness to make statements acceptable to Beijing. Whether this is happening remains to be seen. However, TAO Minister Zhang statement on March 23 – “The ball is in Taipei’s court” – reflects Beijing’s strategy to inflate the importance of May 20 and claim that all responsibility for the future is on Tsai. This too is typical political behavior by Beijing.

One event occasioned some unwanted controversy for Beijing. In February, Foreign Minister Wang Yi visited Washington. In response to a question after his speech at the Center for Strategic and International Affairs (CSIS), Wang expressed the hope that Tsai would acknowledge the provision of Taiwan’s own constitution that Taiwan and the mainland both belong to one and the same China. Was this a signal that some mention of the 1947 constitution’s nature might meet Beijing’s requirements? TAO Minister Zhang has stated several times that there was no change of policy. Other unnamed sources have asserted that Wang had been authorized to float the idea.

Beijing’s campaign to pressure Tsai focuses on the matters of principle that it considers of crucial importance. At the same time, Beijing is indicating that, regardless of what Tsai may say, Beijing will continue promoting most aspects of its peaceful development policy. At the annual Taiwan Affairs Work Conference in Beijing in early February, Yu Zhengsheng said Beijing would continue to promote exchanges, contacts with social groups and political parties, pay particular attention to programs for young people, promote academic and cultural programs, support Taiwan business, and encourage commercial and investment relations. In late March, ARATS Deputy Sun Yafu said that economic ties would continue even if political ties were suspended. In mid-April, the TAO announced that the eighth Cross-Strait Forum, nominally private on the mainland side, would convene on June 11 in Fuzhou and focus on exchanges and youth programs. On April 27, Yu Zhengsheng told a meeting of the National Association of Taiwan-invested Enterprises that Beijing values their role and will continue to promote Taiwan investment.

On May 6, the World Health Organization invited Taiwan, as “Chinese Taipei,” to participate as an observer at the May 23-27 annual meeting of the World Health Assembly (WHA). A TAO spokesman said Taiwan’s participation each year since 2009 was based on the 1992 Consensus; this year, he said, the invitation reflects the Mainland’s goodwill, but such arrangements will become difficult if the political basis of cross-strait relations is destroyed.  As of May 9, the DPP that its incoming minister of health would attend, but that there is no link between this participation and the one China principle.

US policy

In the two weeks before the election, Washington continued to indicate its neutrality among the presidential candidates repeating that it would work with whoever was elected. As soon as the results were announced, Washington congratulated Tsai and reiterated its profound interest in the maintenance of cross-strait peace and stability. Washington promptly dispatched envoys to Taipei and Beijing to keep open lines of communication and underline that core interest. On Jan. 18, former Deputy Secretary of State Williams Burns visited Taipei and met President-elect Tsai, exchanging views on US-Taiwan and cross-strait relations. On Jan. 21, current Deputy Secretary Antony Blinken, who was in Beijing for wide ranging consultations, met TAO Minister Zhang.

In the ensuing weeks, Washington has seemed remarkably calm about the prospects for relations between the DPP and Beijing. Although most US scholars and commentators were predicting various degrees of tension or confrontation, official spokesmen did not express such concerns. To the contrary on April 6, Assistant Secretary of State Daniel Russel said the US values the sincere efforts both sides have made to promote communication and understanding. President Obama and President Xi met in Washington during the Nuclear Security Summit. In a meeting that was characterized as having considerable tension behind a veneer of cooperation, the leaders reportedly touched only briefly on Taiwan. At the meeting, Xi urged the US to take concrete actions to support peace in the Strait. This probably meant that Xi hoped the US would persuade Tsai to accept the 1992 Consensus.

On April 28, Deputy Secretary Blinken included a concise statement of current US views on these issues in Senate testimony. He reiterated Washington’s fundamental interest in peace and stability and continued adherence to its one China policy. Washington called on both sides to engage in constructive dialogue because direct channels of communication reduce risk. Blinken also urged Beijing to show flexibility.

Separately, the US Congress passed and President Obama signed a bill requiring the State Department to design a plan to promote Taiwan becoming an observer in the International Criminal Police Organization (INTERPOL). Predictably Taipei welcomed this, and Beijing criticized the US for interfering in China’s internal affairs.

Continued KMT disarray

The election outcome was a devastating defeat for the KMT. While Tsai and the DPP ran a good campaign, the outcome also reflected the disarray within the KMT and the wider divisions within the pan-blue camp. After the election, KMT Chairman Eric Chu resigned after appointing Vice Chairman Huang Ming-hui as acting chair. Huang is a former legislator and two-term mayor of Chiayi City in southern Taiwan. She moved promptly to organize an election for a person to serve the remainder of Eric Chu’s term as chairman. Huang Ming-hui, former Candidate Hung Hsiu-chu and two younger KMT officials conducted a lackluster inner-party campaign.

As KMT party membership had shrunk from about a million in 2001, only about 350,000 KMT members were eligible to vote in the chairmanship election. On March 26, 140,000 members voted and Hung Hsiu-chu was elected with 78,829 votes. Hung’s tenure runs through the summer of 2017. The result seemed to reflect the extent of current KMT apathy and a sympathy vote by Hung’s supporters for the way she had been removed as the party’s properly nominated presidential candidate. In January, pan-blue candidates had won 44 percent in the presidential election and 39 percent in the party list election. This provides a base for rebuilding the KMT. However, few observers believe Hung is well positioned to lead reform because her pro-unification views are so out-of-step with public opinion in Taiwan.

General Secretary Xi sent Chair Hung a congratulatory message on her election, to which Hung promptly replied. Both pledged continued cooperation. However, Beijing is concerned by the weakness of the KMT, which has been its principle interface over the past eight years.

Minimal progress in cross-strait relations

As Beijing and Tsai signaled each other, day-to-day cross-strait relations carried on, slowly. On Jan. 5, Xinhua reported that residents of three interior cities would be permitted to travel through Taiwan to third countries (without the usual permits for travel to Taiwan); the first few tourists transited on Feb. 1. Beijing conceded this after two years of negotiation, though Taipei never agreed to its demand that that flights from China to Taiwan could proceed directly across the median line of the Taiwan Strait. A ninth round of negotiations on the establishment of SEF-ARATS representative offices was held in early January and “initial consensus” was reached on the framework of an agreement. Disagreements remain on the security of offices and residences, and codes of conduct for representatives in each other’s territory. Further progress before May 20 is unlikely.

Other initiatives are clearly stalled. Taiwan’s Ministry of Finance said on Jan. 18, two days after the election, that in accordance with cross-party consensus it would continue to pursue membership in the China-led Asian Infrastructure Investment Bank (AIIB). On April 7, AIIB President Jin Liqun said that Taiwan should apply for membership through China’s Ministry of Finance – not to the AIIB itself – after which the Ma administration said it would no longer pursue membership because Taiwan was not being treated with dignity and equality.

Technical talks on the MTA took place in early January, but on Jan. 29 ROC Premier Simon Chang admitted there was little chance that negotiations would be completed before May 20 and also said that regulatory decisions on several proposed cross-strait mergers and investments between chip design companies will be left to the Tsai administration. On April 28, one Taiwan-based company announced a cancellation of its deal with a Chinese partner, citing uncertainty about cross-strait relations.

In what should have been a bright spot in cross-strait relations, ROC Minister of Justice Luo Ying-shay led a delegation of officials to China on March 28, at the invitation of China’s Supreme People’s Procuratorate. But soon after Luo returned to Taiwan, China forced the deportation of a total of 45 ROC citizens from Kenya to China. They and a number of PRC citizens had been acquitted of certain charges in Kenya, but were sought by Beijing for defrauding citizens in China. On April 11, President Ma and many others said the Chinese side had violated due process and demanded the return of the prisoners to Taiwan. On April 12, Taiwan officials acknowledged that Taiwan did not have jurisdiction because the fraud had been perpetrated in Kenya and the victims were located in China. But on April 13, the Ministry of Justice claimed “concurrent jurisdiction,” and MAC Minister Andrew Hsia claimed that China was in violation of the 2009 Cross-Strait Joint Crime Fighting and Mutual Legal Assistance Agreement.

Efforts then turned to gaining access to the prisoners, and officials traveled to Beijing on April 20. The delegation was permitted to speak with the prisoners via video connection, and said it had reached consensus with the Chinese side to jointly investigate the fraud ring based in Kenya and another in Malaysia. Investigation by Taiwan officials is important: 20 members of the group in Malaysia had been sent to Taiwan on April 15, but were quickly released for lack of evidence – though 18 of these were arrested and the other two are barred from leaving the country. On April 30, Malaysia sent 32 other members of this group to China, raising new protests in Taiwan. These incidents do not represent attempts to pressure Tsai Ing-wen, but they highlight the need for communication between the two sides as on-the-ground bilateral relations will continue after May 20 regardless of high-level pronouncements.

South China Sea

As the end of his tenure and the ruling by the Permanent Court of Arbitration (PCA) on the Philippines’ case against China approach, President Ma has remained very active in promoting Taiwan’s claims in the South China Sea. While the Ma administration has said consistently that it will not accept the court’s ruling because it was not permitted to participate in any way, and Joseph Wu indicated the same in his January speech in Washington, Taipei has sought to protect itself from a possible implication in the ruling that Taiping Island (Itu Aba) is a “rock” rather than an “island,” which would limit its exclusive economic zone.

On Jan. 28, President Ma visited Taiping Island, causing a State Department spokesman to say that the US was “disappointed” and that the action was unhelpful in resolving disputes. Such a strong rebuke seems like a high price to pay, but Ma succeeded in highlighting the ROC’s claim. On March 21, Taiwan’s Ministry of Foreign Affairs (MOFA) released a position paper reiterating the ROC’s claims to “South China Sea Islands and their surrounding waters” (but not the entire sea), highlighting Taiping. On March 23, MOFA escorted a group of international journalists to Taiping to demonstrate its “island” features and drum up publicity; a group of international scholars visited on April 15. On April 8, President Ma led a seminar for MOFA officers – followed by a question and answer session with reporters – clarifying the historical and technical aspects of the ROC’s claims. The following day he visited Pengjia Islet north of Taiwan, close to the disputed Diaoyutai (Senkaku).

President Ma is sometimes accused of supporting PRC claims in his defense of Taiping’s “island” status. He and President-elect Tsai held a private meeting on March 30, after which spokesmen for each expressed solidarity in their views on the South China Sea. Ma asked that the Tsai administration not be “absent” in defending the ROC claim. On April 9, following his visit to Pengjia, Ma indicated that he plans to remain active on both the South and East China Sea issues after his term ends.

Looking ahead

What President Tsai will say in her inaugural address May 20 will influence relations in the following months. As she will not clearly endorse either the 1992 Consensus or one China, Beijing will face decisions on what cross-strait communications will be cut off, how to deal with practical matters under the 23 existing cross-strait agreements, and how to continue the unofficial aspects of its peaceful development policy. Its choices will be shaped by the conflict between its interests in treating a government that does not accept its core principles differently from one that does, while still pursuing its interest in cultivating good will among the people of Taiwan. Now that Taiwan has been invited to the WHA meeting, the next test will be the June 26 Panama Canal Ceremony to which both Xi and Tsai have been invited by one of Taiwan’s diplomatic allies. Also in this time period, the PCA decisions will be announced, confronting both Beijing and Taipei with responding to what will likely be seen by each as an unfavorable ruling.

President Tsai will be challenged to maintain DPP unity behind her policy, including LY passage of the party’s version of the cross-strait oversight bill, while dealing with whatever actions that the mainland takes after May 20. The coming months will also be a test of Chairman Hung’s ability to begin rebuilding the KMT. And, former President Ma will have to define his future role, including on his signature interests related to East/South China Sea and cross-strait issues.