Books on Taiwan
Update No: 052 - (01/06/08)
Incoming President, Ma Ying-jeou of the Kuomintang (KMT) party
was sworn into office on Tuesday 20th May ending eight years of rule by the
Democratic Progressive Party bringing with him a fresh opportunity to bring life
back to the relationship with the Chinese mainland. President Ma made it clear
from the outset that a more open and active policy towards exchanges with
Beijing was high on his agenda. This was confirmed by the address he gave during
In his inauguration speech, the new president called for renewed cross-straits
negotiations based on the “1992 consensus” which accepted the principle of
“one China” but left ambiguity in how this concept was to be interpreted
with the PRC and Taiwan free to make their own interpretations.
The thrust of the message was to urge the maintenance of the status-quo across
the Taiwan Straits under the present Republic of China Constitution and a return
to the principles of “no unification, no independence and no use of force.”
Ma also referred to the hopeful beginning with the agreement reached at the
April Boao Forum in China where, in sideline discussion, both sides acknowledged
that they would “face reality, create the future, put aside differences and
pursue a win-win outcome”—words of Chinese Premier Hu Jintao.
Charter flights bringing up to 3,000 Chinese tourists a day to Taiwan are
expected to start in July this year provided Beijing gives its approval. This
will be the first positive result of the new relationship. The move will be both
symbolic and practical; direct flights between Taiwan and the mainland of China
will provide a welcome boost to Taiwan’s economy but at the same time will
reinforce the view that Taiwan is returning to the bosom of its ancestry.
Mr. Ma barely mentioned the relationship with the United States in his speech.
He merely expressed the hope of strengthening cooperative relations with
Taiwan’s “security ally” and “trade partner.” Again, it was another
signal to Beijing as to where Washington ranks in the order of priorities of the
But aside from the renewed emphasis on the relationship with China, President Ma
has sought to project himself as an inclusive president. He has announced that
he will respect constitutional tradition and allow those from the DPP holding
high office to complete their term. He has also signalled that his presidency
will not be a case of “jobs for the boys” but rather that he would promote
the concept of a meritocracy where political affiliation would count less than
suitability for the job. It remains to be seen how this lofty concept pans out
Mr. Ma also intends to project himself as Taiwan’s “green” president. His
administration has announced a series of measures designed to save energy and
reduce carbon emissions. The formal announcement of these measures is scheduled
for June 5 which has been designated as World Environment Day. While the new
measures will only affect government departments, the hope is that the
energy-saving measures to be introduced will rub off on local society as a
The business sector has generally welcomed the changing of the guard in Taipei
in the belief that the KMT will be less confrontational—in dealing with both
Beijing and Washington—and that as a result the economic opportunities will
improve. Not that Taiwan has been doing all that badly but there is a general
perception that under a KMT government it will do even better. Whether by
accident or design, the Council for Economic Planning and Development has
announced that Taiwan will likely surpass its original economic growth target of
4.8 percent this year and it will keep inflation at between three and four
percent. In a global environment where oil is now trading at $135 per barrel and
international rice prices are around $1,000 a tonne, this will be no mean feat.
During the first quarter, the domestic economy expanded by 4.32 percent. This
was less than the present full year expectation and considerably below Mr.
Ma’s election promise of a six percent growth rate (which has now been
interpreted as a four year average over his term). The expected surge of tourism
from China will play a significant role in helping Taiwan strengthen its overall
growth for the year although no new target has yet been announced and the
expectation has been left deliberately vague.
But other sectors will play their part too. The index of industrial production
increased by 9.61 percent year-on-year in April—well above the expectation of
between 7.4 and 8.15 percent. In the same month, export orders rose by 15.69
percent to US$4.31 billion. The April figure confirmed the trend so far this
year; in the first four months exports expanded by 15.71 percent.
Increased spending on public construction as well as increased private
investment will also give a positive impetus to the year’s growth prospects.
The exchange rate of the New Taiwan Dollar to the US dollar is also moving
upward and is expected to break the 30.0 barrier in the near future. At present
it is trading at around NT$30.50
So all in all, President Ma has started his presidency on the right foot and he
can expect to enjoy a honeymoon period at least until July. It does appear at
this stage that China is relieved by the change of government and that some form
of increased cooperation between the two sides will result. How far that will
carry Mr. Ma over the longer term is difficult to tell. He has already let down
his guard by saying that he does not expect unification to come within his
lifetime. China, diplomatically perhaps, did not respond to that remark.
The ball is now in China’s court to respond. As one newspaper has already
pointed out “a failure by Beijing to respond positively to Ma’s olive
branches will seriously undercut the new Taiwanese leader as he tries to build
consensus at home in support of his forward-looking cross-Strait policies. His
address is already being labelled by the opposition as “naive” and
“wishful thinking.” Will Beijing prove this to be the case? Only time will
tell but the early omens are promising. China’s reaction to the inaugural
speech was low-key but encouraging. We can only assume that much more is going
on behind the scenes.
Former President Chen Shui-bian has not fared quite so well. The wife of the
former president has been barred from leaving the country during her ongoing
trial on corruption and forgery charges. Mr. Chen was also named a suspect but
escaped immediate prosecution because of presidential immunity. But prosecutors
launched a corruption probe against Chen less than an hour after he lost his
immunity once Ma Ying-jeou had been sworn in.