Taiwan’s Presidential Election, With David Sacks

LINDSAY:
Welcome to The President's Inbox, a CFR podcast about the foreign policy challenges facing the United States. I'm Jim Lindsay, director of Studies at the Council on Foreign Relations. This week's topic is Taiwan's presidential election. 

With me to discuss Saturday's presidential election in Taiwan and its potential geopolitical consequences is David Sacks. David is a fellow for Asia studies here at the Council. His work focuses on U.S.-China relations, U.S.-Taiwan relations, and cross-strait relations. David was the project director of CFR's independent task force report, U.S.-Taiwan Relations in a New Era: Responding to a More Assertive China. David, thank you for joining me.

SACKS:
Thanks for having me.

LINDSAY:
If we may, David, let's begin with the big picture. 2024 is going to be the mother of all election years. Over the next twelve months, more than three dozen countries, with a total population of some four billion people, will see their citizens heading to the polls. Now, a lot of people who track elections, including me, have flagged the election in Taiwan as one of the most important of the year. Why is the Taiwanese presidential election so significant?

SACKS:
So the context is that the current president, Tsai Ing-wen, of the Democratic Progressive Party has been in power for eight years. She's done a lot to strengthen U.S.-Taiwan relations and really assert Taiwan on the global stage. But at the same time, there hasn't been any communication with Beijing over the last eight years. While that has occurred, Xi Jinping's threats towards Taiwan have increased. The rhetoric has also gone up a notch. Just recently in his New Year's address, Xi Jinping called unification with Taiwan a "historical inevitability." So the real question turns to whether Xi Jinping feels more urgency to act and to move towards unification, depending on the results of the election. Right now, Tsai Ing-wen's vice president, William Lai is ahead in the polls. If he pulls out a victory and Xi Jinping is looking at potentially twelve years of DPP rule in Taiwan, that would raise real questions, I think, in Beijing as to whether the KMT, its preferred interlocutor, is a spent political force and whether it needs to adjust its policy towards Taiwan and really turn up the temperature.

LINDSAY:
Okay, David, let's delve into the details there. You've mentioned the KMT. You've mentioned the DPP. This is a three-person race in Taiwan. Run through the candidates and their party background and what they're running on.

SACKS:
Sure. Tsai Ing-wen's vice president, William Lai of the Democratic Progressive Party, he is a doctor by training, someone who entered politics relatively late in life, was the mayor of a large city in Taiwan before becoming Tsai's premier and then her vice president. He is generally seen as somebody who is what we would call a deeper green political figure, whereas Tsai is seen as kind of a moderate. Lai has said before that he is a pragmatic worker for Taiwan independence.

LINDSAY:
When you say deeper green, what do you mean by that?

SACKS:
Deeper green is generally known as the pro-independence wing of the party. Now, I don't think that Lai is going to pursue de jure independence and try to join the United Nations under the name of Taiwan or anything like that. He has tried to signal, since getting the DPP nomination, that he would maintain the status quo and really continue Tsai's cross-strait policy. But those previous comments have raised suspicion in China on his intentions and what he would do as president.

LINDSAY:
David, can I hold you just for a second there and interrupt? It may be worthwhile just to take a step back for a second and just outline what the status quo is, because Taiwan has not declared independence, but it's also not part of the mainland.

SACKS:
Yeah, so the status quo is a hotly contested term. I would say that the United States, Taiwan, and China all define the status quo differently. But for somebody like William Lai or Tsai Ing-wen, I think the status quo is that Taiwan is already a sovereign independent state under the name the Republic of China, Taiwan. Therefore, Taiwan doesn't need to declare independence, because no country declares independence twice. Taiwan has its own currency, its own monetary policy, its own military. As we're going to see on January 13th, it elects its own leaders. So it is a de facto independent country, but it isn't recognized as such by most countries in the world. Only a dozen or so countries have formal diplomatic ties with Taiwan, and most-

LINDSAY:
And the United States is not one of them.

SACKS:
Yeah, most countries, including the United States, have unofficial relations with Taiwan. So we do not have an embassy in Taipei. We do not have an ambassador to Taiwan, and there are various carve-outs so that we maintain our unofficial relationship with Taiwan.

LINDSAY:
Okay, now I should note that for the CFR.org blog, Asia Unbound, you've profiled the candidates. You've talked about Lai. Tell me about the other two candidates.

SACKS:
So Hou Yu-ih is the KMT candidate, and he is currently serving as the mayor of New Taipei City. He was a career civil servant who rose to become Taiwan's chief of police. The interesting thing about Hou Yu-ih is that he's a native Taiwanese, which means that his family immigrated to Taiwan prior to the Chinese Civil War. If you watch the presidential debate, for instance, Hou Yu-ih spoke much more Taiwanese than Mandarin Chinese during the debate. On the campaign trail, he speaks more Taiwanese than Chinese as well, so he's a different breed of KMT candidates, so to speak. He wrote a very, what I think was an important essay for Foreign Affairs outlining his foreign policy and national security positions.

At the beginning, he tried to stay away from the so-called 1992 Consensus, which was Ma Ying-jeou's approach to China which enabled cross rate interaction. But in recent months, he has endorsed the 1992 Consensus, which China likes to see. But at the same time, he has tried to modify it in a sense to say that it's not the equivalent to one country, two systems, and that he would implement it in a way consistent with Taiwan's constitution. So this is all very complicated, but essentially the KMT's platform is that they would pursue dialogue and closer interaction with China, but that they wouldn't sacrifice Taiwan's sovereignty or its autonomy or pursue unification with China. Now-

LINDSAY:
Just to be clear here, when you talk about the KMT, Kuomintang, that was the party that historically dominated Taiwan after the nationalist government moved from mainland China to Taiwan after losing the Chinese Civil War, correct?

SACKS:
That's right. The Kuomintang came over to Taiwan with Chiang Kai-shek, ruled the island under martial law, and then oversaw a transition to democracy with Taiwan holding its first presidential election in 1996. The first transfer of power from the KMT to the DPP occurred in 2000, and the DPP ruled Taiwan from 2000 to 2008 before it went back to the KMT, and now has been with the DPP for the last eight years.

LINDSAY:
Okay, now we have the third candidate from the Taiwan People's Party.

SACKS:
That's right. So Ko Wen-je rose to prominence as a doctor, a pretty well-known organ transplant specialist in Taiwan. He really got a national profile in 2014 when he was a supporter of the Sunflower Movement, which was largely a student-led protest movement that occupied the legislature to try to stop the Ma administration from signing a Cross-Strait Service Trade Agreement with China. The concerns here were basically that Taiwan would become much more economically dependent on China and lose optionality down the road. So Ko rose to prominence as a pan-green figure, someone aligned with the DPP. The DPP chose not to run a candidate against him when he ran for mayor of Taipei, and he was elected in a landslide the first go around.

But then, he had an interesting political evolution as he began to embrace policies that are more closely associated with the KMT. So he had a cross-strait forum between Taipei and Shanghai that he ran every year. He talked about both sides of the Taiwan Strait belonging to the same family and sharing a common destiny. So the DPP began to be disaffected with Ko Wen-je, ran a candidate against him when he stood for reelection, and he was reelected much more narrowly as a result. So right now, as it stands, Ko Wen-je is actually seen in my view as more of a pan-blue politician, someone who's potentially taking more voters away from Hou Yu-ih than he is from William Lai. His supporters are largely young. They appreciate his populist approach, the fact that he bucks conventional wisdom, calls it like he sees it. But at the same time, it's difficult to pin down what his actual policies are or would be, because he does tend to flip-flop between certain positions.

LINDSAY:
So I have to ask, David, on the question of relations with the mainland, are the three candidates in different places? Or are they more or less in agreement, and we're really arguing about nuanced differences?

SACKS:
So I think that publicly, all of the candidates would disagree with what I'm about to say, because they are trying to draw big distinctions between all their positions. For the KMT, if you vote for William Lai, it's a vote for war. The election is about a choice between war and peace. For William Lai, if you vote for Hou Yu-ih and the KMT, that is a vote for subordination to China and giving up Taiwan's autonomy. But actually, I would argue that at a 40,000-foot level, all the candidates want to maintain the status quo. They all know that an attempt to pursue de jure independence would likely prompt a conflict with China. So they're not going to go there. They also don't want any part of unification, because Taiwan is a democracy. They want to be elected and win elections, and the Taiwanese people don't want unification with China. It's very unpopular.

So the real difference, in my view, is on how best to maintain the status quo. So for Hou and Ko, communication has to be a large part of that. If you're talking to China, the chances of a conflict go down a lot. For Lai, it is more about building relations with the United States, Japan, other democracies around the world, reducing economic reliance on China, and bolstering Taiwan's defenses. That is the best way to secure Taiwan's autonomy in their view, and they put less stock in communicating with Beijing and don't want to become more economically intertwined with China. So I think that it's more of a debate on your method, rather than your goal.

LINDSAY:
So David, what you seem to be describing is a general consensus, again at the 40,000-foot level, about what relationship Taiwan should have with the mainland, not declaring independence, definitely not seeking unification. How has that consensus emerged?

SACKS:
Well, there's a couple of real watershed moments that we can point to. The first one, when this goes back to Taiwan holding its first presidential election in 1996, is the rise of Taiwanese identity, national identity really emerging that is rooted in, in many ways, Taiwan's political system. Taiwanese citizens value their democracy. They look across the strait at the PRC and do not want to live under authoritarian rule. So this is something that they really want to protect. What has, I think, made the choice much starker is what has happened in Hong Kong, especially since 2020. When Hong Kong was returned to the PRC, China pledged to implement one country, two systems. Hong Kong would have a high degree of autonomy, but with the passage of a national security law in 2020 and the implementation of that law, we've seen that it's essentially one country, one system, and that the one country element takes priority or precedence over the two systems.

So there's been really an assault on freedom of speech, freedom of expression, and political rights in Hong Kong. Taiwan looks at this and says, "Well, wait. China has proposed the same exact formulation, one country, two systems, for us. So will we become the next Hong Kong post-unification?" And they don't want that. The third thing that I would point to is the war in Ukraine. Putin's invasion of Ukraine has revealed to Taiwanese people that authoritarian leaders with territorial ambitions can seek to pursue those militarily, that they need to be prepared for such a scenario, and it's not really out of the question. 

I think for a long time, the prevailing attitude in Taiwan was basically, listen, we've lived under this threat for decades. Our parents lived under the threat. Our grandparents lived under the threat, but at the end of the day, China's likely not going to use force against us. It would be too costly, too unpredictable. This is essentially somewhat of a bluff. But I think right now, there is a sense of, wait, Putin did this to Ukraine. We can't rule out that Xi Jinping would do the same thing to us. So you combine all of that together and you see much less support for unification. But interestingly as well, I think you've seen less support, at least according to one longstanding and trusted poll, for seeking independence. Because, they know the consequences of doing so, and they're pragmatic, practical voters who basically say, "Well, what we have right now, it's not ideal. We're not in the United Nations. We're not recognized as a country by most of the world. But, it's better than all of the alternatives."

LINDSAY:
So as you look at this election, David, we've been focusing on Taiwan's relations with China, but is that the dominant issue in the campaign? Or will Taiwanese voters be making their decisions on other issues, perhaps domestic issues?

SACKS:
So with Taiwan, I think it is important to note that cross-strait relations is really the $64,000 question at the national level for presidential elections. Local elections, you can kind of ignore that and you can talk about issues for a city or a municipality and how you're going to solve those. But for Taiwan, there is a sense that you need a president who understands cross-strait relations and can manage this incredibly complex, intense problem facing Taiwan. At the same time, there are a number of domestic issues, as there are for any other place in the world. There's been eight years of DPP rule. There is a sense of fatigue with that. Some voters want change, just to have new ideas and a refresh, so to speak. There are frustrations with rising housing prices, inflation, youth unemployment, issues that are not unique to Taiwan, and the candidates have different views on how to resolve this.

But on foreign policy and national defense, what I would argue is there is a very broad alignment that we see among the candidates because of what you've seen in Hong Kong and Ukraine and what's happened over the past decade or so, as well as the fact that you have a much more assertive, capable China under Xi Jinping. So for instance, all three candidates have emphasized the need to bolster Taiwan's defenses. Ko Wen-je and Hou Yu-ih have called for raising the defense budget to 3 percent of GDP. Tsai Ing-wen has nearly doubled Taiwan's defense budget over the last eight years, and Lai said he would continue with those increases. They all use the same kind of buzzwords that Taiwan has to pursue an asymmetric defense strategy, procuring missiles, mines, and other cheaper, smaller weapon systems.

LINDSAY:
But that runs against where Taiwan has invested in defense in the past. Typically, Taiwan has bought into big, visible systems, airplanes and the like, rather than these cheaper, more defensive oriented weapons. Correct?

SACKS:
Yeah, there is a school of thought in Taiwan that basically the best part of a weapons platform is the political symbol that it sends to Beijing, rather than its combat capabilities, if there were to be a conflict in the Taiwan Strait. Therefore, the thinking is, well, if the United States is selling us the most advanced F-16 fighter jets, that shows China that the United States is serious, that it supports Taiwan, and that it'll be there for us. I think that that logic is very flawed, but we should recognize that that exists in Taiwan. But you're also correct that Tsai has started to transition Taiwan's military away from that. I would argue there has been progress, but it's going to take a lot of time and a lot of sustained oversight and political capital to really turn it around.

LINDSAY:
My sense is the Ukraine war has been pivotal on that score, showing the importance of having a defense.

SACKS:
It's also, I think, it's scared Taiwanese people at the one level that they've seen images of Mariupol and other cities in Ukraine, and they don't want to see that obviously in Taiwan. But on another level, it's also given them some level of hope. Just because a military is bigger, stronger on paper, doesn't necessarily guarantee success on the battlefield. So you have drones. You have missiles. You have other platforms that can stymie an invasion. So we see Taiwan investing in a lot of that domestically. So they are attempting to develop and build out swarms of drones and other unmanned platforms. There are capable missiles made on Taiwan, and they're ramping up the production of those as well.

So I guess my bottom line is, I think regardless of who wins this election, I would expect that all to continue. I don't think there will be a sharp pivot where the KMT and Hou Yu-ih would say, "Well, you know what? We're talking to the PRC, so now we can lower our defense budget. Now, we can shift away from that and spend it on social welfare programs." I don't think that that will happen. I think that we will continue to see these steady increases regardless of the outcome.

LINDSAY:
David, what is the status of the argument in Taiwan at the fact that Taiwan is home to such a large amount of semiconductor production, essentially gives it a shield against Chinese aggression? Does that argument still carry sway? Or has it lost some of its appeal, given recent world events?

SACKS:
So this is a very, very complex issue in Taiwan, especially when you have some Americans calling for blowing up TSMC during a conflict with China and the fact that we can't let TSMC fall into China's hands, et cetera. So China, I think, has exploited this discourse to basically try to drive a wedge between Taiwan and the United States and say, "Listen, Americans don't have your interests at heart. They're going to take away your semiconductor production, relocate it to Arizona and Japan. Once you don't have any semiconductors, America is not going to defend you, because they won't have any interest in doing so." Vivek Ramaswamy, for instance, has basically said this. Once the United States achieves semiconductor independence, we can basically let Taiwan go. So that is a part of the conversation now, and it's a very unhealthy conversation taking place in Taiwan.

My response to that though would be that Taiwan produces 90 percent of the world's most advanced semiconductors. That's not going anywhere. TSMC has said that that's going to remain on the island, regardless of how successful the CHIPS Act and these investments in Arizona and elsewhere are. You're not going to relocate 60 percent of the world's semiconductors off Taiwan. So this is the position we are in, certainly for the next four years, but I would argue for at least the next decade or more. So those fundamentals really will not change, but you've seen the candidates talk about working with the United States on building resilient or secure supply chains. Taiwan sees a role that it can play in that effort. So I think that Taiwan is trying to walk a very fine line here, but I don't think that the prevailing sentiment in Taiwan is basically, China won't attack, because they can't afford to destroy all of our semiconductors, because they need them to make products in China.

LINDSAY:
We're a couple of days out from the election, David, as we're chatting right now. The conventional wisdom is that this is Vice President Lai's election to lose. I will note that some of the recent polls show the race tightening up. It's always a risk to make predictions especially about the future, but let's assume that the conventional wisdom holds. Vice President Lai becomes President Lai. How do you anticipate Beijing reacting to that outcome, particularly since you noted at the outset that for the past eight years, Beijing has basically kept the DPP government at arms length and has not engaged with Taipei?

SACKS:
Sure, so I'll put one other factor on the table before answering that, which is that Taiwan's voters will also be electing the next legislature along with the president. I mentioned general fatigue with the DPP. So one potential outcome is that Lai wins the presidential election, but the DPP does not retain its majority in the legislature, and the KMT either wins an outright majority, or it's able to form a coalition with Ko's Taiwan People's Party and potentially others as well. If that happens, then China might take some solace in the result and say, "Well, Lai is the president, but he basically can't do anything, because the KMT can stymie anything that he would do that would alter cross-strait relations or Taiwan's approach to China and things of that nature." So that might play a role in shaping China's response.

But setting that aside, China, they didn't talk to Tsai for eight years, and they trust Lai far less than they trusted Tsai. Lai will not say the magical four Chinese characters of the 1992 Consensus, which China continues to insist has to be the basis of cross-strait engagement and interaction. So you would likely see, continuing what we've seen for eight years of no discussions between China and Taiwan, as well as an array of pressure tactics put on Taiwan. So economically, China is reviewing the Economic Cooperation Framework Agreement, or ECFA, which is the large trade agreement that Ma negotiated. Ironically, it is up for review the day before Taiwan's presidential election. So China could decide to put on a bunch of sanctions and tariffs on Taiwanese companies and basically say, "If you continue to elect the DPP, you're not going to get preferential treatment in China's market, and it's going to hurt you economically."

Militarily. I would expect to see many more flights through Taiwan's self-declared air defense identification zone. Those would likely increase both in scale and in frequency, and we would see other military activities ramp up in the Taiwan Strait. Politically, China could attempt to peel away more of Taiwan's, quote, "diplomatic allies," which are those countries we talked about that still formally recognize Taiwan and have embassies and ambassadors. So this is a well-worn playbook, something that China is comfortable with, and something that China is going to continue to pursue. What I would say, and this doesn't gain any traction with Chinese interlocutors, is that this doesn't have the intended effect of bringing Taiwan closer to China and making them essentially realize that voting for the DPP is bad, so they should vote for the KMT, which is China's goal. Instead, this pushes Taiwan farther away and really does help harden this view that China is not friendly, that Taiwan has to go its own way and pursue a separate identity. So it's counterproductive, I would argue, but it's what China knows how to do. It's what they're comfortable doing, and they're going to continue with this playbook.

LINDSAY:
So what challenges does all of this pose to the United States, David? The Biden administration already has a pretty full inbox. Are we looking at a sharp increase in tensions across the strait? And is there anything the Biden administration can or should be doing?

SACKS:
Well, I think that you're right in pointing to the full inbox. I think the number one priority for the Biden Administration is making sure that we don't have a crisis in the Indo-Pacific as we have a war between Israel and Hamas in the Middle East and the war between Russia and Ukraine in Europe. So I think there will be a big emphasis on deescalation and on trying to ensure that there aren't any unintended incidents as well, as China ramps up its military activity in the Taiwan Strait and over the median line and closer and closer to the island itself. Now, what I would argue that the Biden Administration will need to do, as well, is to give Taiwan confidence in U.S. support. A Taiwan that is not confident, that feels like it's out on its own, I think, would be more prone to destabilizing behavior.

So it would be in our interest to do things like try to alleviate any economic sanctions or penalties that China imposes on Taiwan, strengthen our economic relationship with Taipei, as well as do what we can to really bolster their defenses, expedite arms transfers to Taiwan, help its military reform, and pursue this more asymmetric path. So these are all things that we are definitely already doing with Taiwan, but need to be really expedited and pursued, I would say with more vigor. 

The final point, messaging is always very important on Taiwan. This is a relationship where every word is parsed in Beijing and Taipei, and it's all read very carefully. When Tsai Ing-wen was elected president, the United States urged both sides to kind of find a way to restart communications. It was very even-handed. It then switched to putting the onus on Beijing to begin communicating with Taiwan's democratically elected leader. I think that was a recognition that Tsai had extended an olive branch to Beijing in her inaugural address in 2016 that could have formed the basis of cross-strait interaction, but that was swatted away by Beijing. 

So if my assumption is correct, and Lai doesn't do anything to pursue de jure independence and doesn't try to change the status quo in any way, then the United States should very clearly and confidently say that the source of increased tensions is China and Chinese pressure on Taiwan and that it expects China to find a way to talk to Taiwan's democratically elected leader. So the public messaging is always very important in the context of Taiwan, and it will be again. So we have to figure out what we message, because we have five months between the election in January and the inauguration of the next president in May. That is a critical period where China is going to try to see whether there's any division between Washington and Taipei, increase the pressure, test Taiwan, test us. So that's, I think, going to be a critical period to watch.

LINDSAY:
David, does anything change if the conventional wisdom is wrong and Hou wins the election? Does that mean we're going to have better cross-strait relations? Or would that pose challenges to the United States?

SACKS:
Hou has endorsed the 1992 Consensus. KMT leaders have gone to China in recent months. China has publicly stated its preference for a KMT victory. So I would expect you would see cross-strait dialogue resume. Hou Yu-ih and Ko Wen-je have both said that they would revisit the Cross-Strait Service Trade Agreement which sparked the Sunflower Movement. So you could see, I think, economic interaction. The question would then turn to whether Taiwan is becoming too economically dependent on China and whether that is becoming a vulnerability. So that would be something to watch. I think that Hou and Ko have said the right things publicly on defense. So what we have to do is hold them to it. We have to make clear that Taiwan's defense budget has to continue to increase, regardless of what's happening in terms of cross-strait relations and that we fully expect Taiwan to continue the transition of conscription from four months to one year, that Taiwan is going to overhaul the training of those conscripts, that it's going to pursue this asymmetric strategy that we've been focused on for years, and that it will have a meaningful deterrent capability.

So I think that the focus for the United States shifts to that side of the coin, to the deterrent, and the United States will continue to try to work with Taiwan on supply chain resilience and semiconductors and things of that nature. I think that China is clearly going to want there to be some daylight. It's not happy that Taiwan has gone along with these restrictions of exports to China, and it's going to try to drive a wedge there. So that's also going to be a conversation that has to be had, but I would be surprised if we saw Taiwan under a KMT or TPP administration really revisiting its stance on that issue.

LINDSAY:
On that important point, I'll close up The President's Inbox for this week. My guest has been David Sacks, a fellow for Asia studies here at the Council. David, thank you for coming back on The President's inbox.

SACKS:
Thanks for having me.

LINDSAY:
Please subscribe to The President's Inbox on Apple Podcasts, YouTube, Spotify, or wherever you listen, and leave us your review. We love the feedback. The publications mentioned in this episode and a transcript of our conversation are available on the podcast page for The President's Inbox on CFR.org. As always, opinions expressed on The President's Inbox are solely those of the host or our guests, not of CFR, which takes no institutional positions on matters of policy. 

Today's episode was produced by Ester Fang, with Director of Podcasting Gabrielle Sierra. Special thanks go out to Michelle Kurilla for her research assistance. This is Jim Lindsay. Thanks for listening.