With Vice President William Lai (賴清德) winning the presidential election, but his Democratic Progressive Party (DPP) failing to secure a majority in the legislature on Saturday, his administration is poised to face challenges over the next four years. The obstacles ahead involve not only Taiwan’s thorny relations with China, but also the new domestic political scene and an uncertain global economy.
In President Tsai Ing-wen’s (蔡英文) eight years in office, Taiwan strengthened its partnership with Asia-Pacific countries and formed a consensus with several like-minded nations on regional security. Lai is expected to continue Tsai’s foreign and defense policies such as bolstering ties with the US, Japan and other countries in the Indo-Pacific region, and building new weapons such as submarines and fighter jets.
In the run-up to Saturday’s elections, China used the Economic Cooperation Framework Agreement (ECFA) as a political bargaining chip against Taiwan, and the suspension of beneficial tariffs on several Taiwanese goods is sure to impact domestic industries. Unlike the other two candidates who talked about restarting ECFA negotiations with China, Lai focused on assisting local industries through digital transformation and advocates innovation-driven models to improve firms’ operations. Still, his adminstration should help Taiwanese firms to expand their global presence.
However, Lai faces the daunting task of facilitating meaningful dialogue across the Taiwan Strait without succumbing to Chinese pressure or decreasing Taipei’s goodwill toward Beijing. As Taiwan’s export-oriented economy relies on participation in regional trade blocs, Lai’s administration is expected to step up participation in trade deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Indo-Pacific Economic Framework, to avoid becoming marginalized in the global economy and to respond to China’s growing economic coercion.
The approach Tsai adopted has seen Taiwan gradually reduce its trade reliance on China and increasingly embrace other markets, resulting in significant economic growth and domestic investment over the past eight years. For instance, GDP expanded to NT$23.54 trillion (US$756.21 billion) last year from NT$17.06 trillion in 2015, and GDP per capita even surpassed South Korea’s for the first time in 20 years in 2022. The government’s incentive packages also led to 1,400 companies investing more than NT$2.1 trillion in Taiwan from 2019 to last year.
However, Taiwanese manufacturers no longer focus solely on low-cost contract manufacturing. Instead, the success of the nation’s semiconductor industry and robust shipments of information and communications technology products amid an artificial intelligence boom has made developing high-value, high-margin products the core of domestic industrial transformation and economic value in the post-COVID-19 era.
Due to changes in global politics and economic situations, Taiwanese industries face pressure to transform. Lai’s economic platforms have focused on building an innovative economy and smart nation, involving accelerating the development of semiconductors and artificial intelligence-related technologies, promoting financial technology innovations, as well as continuing investments in green energy, cybersecurity and national defense. He also envisions a future where traditional industries thrive on value-added innovation, net zero carbon emissions and digital technology.
The president-elect also emphasizes policies that promote domestic service industry development, such as in hospitality and tourism, as the industry accounts for about 60 percent of Taiwan’s employment and plays an important role in supporting local small and medium-sized enterprises. Yet he still faces the same problems his predecessor faced, such as high home prices, a low national birthrate and a widening wealth gap. Furthermore, the difficult tasks of accelerating wage growth, creating jobs for young people and promoting talent development also await him.
The gutting of Voice of America (VOA) and Radio Free Asia (RFA) by US President Donald Trump’s administration poses a serious threat to the global voice of freedom, particularly for those living under authoritarian regimes such as China. The US — hailed as the model of liberal democracy — has the moral responsibility to uphold the values it champions. In undermining these institutions, the US risks diminishing its “soft power,” a pivotal pillar of its global influence. VOA Tibetan and RFA Tibetan played an enormous role in promoting the strong image of the US in and outside Tibet. On VOA Tibetan,
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US President Trump weighed into the state of America’s semiconductor manufacturing when he declared, “They [Taiwan] stole it from us. They took it from us, and I don’t blame them. I give them credit.” At a prior White House event President Trump hosted TSMC chairman C.C. Wei (魏哲家), head of the world’s largest and most advanced chip manufacturer, to announce a commitment to invest US$100 billion in America. The president then shifted his previously critical rhetoric on Taiwan and put off tariffs on its chips. Now we learn that the Trump Administration is conducting a “trade investigation” on semiconductors which
By now, most of Taiwan has heard Taipei Mayor Chiang Wan-an’s (蔣萬安) threats to initiate a vote of no confidence against the Cabinet. His rationale is that the Democratic Progressive Party (DPP)-led government’s investigation into alleged signature forgery in the Chinese Nationalist Party’s (KMT) recall campaign constitutes “political persecution.” I sincerely hope he goes through with it. The opposition currently holds a majority in the Legislative Yuan, so the initiation of a no-confidence motion and its passage should be entirely within reach. If Chiang truly believes that the government is overreaching, abusing its power and targeting political opponents — then
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