Bloomberg: Taiwan’s election is all about war

Bloomberg has published an article stating that Lai Ching-te, the vice president, is ahead in the polls of Taiwan’s elections. Can he keep the peace with Beijing? Caliber.Az reprints the article.

Lai Ching-te, Taiwan’s vice president and the leading presidential candidate, is sitting in a shabby office building in central Taipei trying to enjoy his bubble tea. But the college students around him tease: The boba might not be sugary enough for the former kidney doctor’s infamous sweet tooth.

The moment is unscripted and meticulously inoffensive—and very much on brand. Lai is trying hard to be a low-voltage continuity candidate in one of the most fractured races in Taiwan’s history. He’s soft-spoken and mild-mannered; setting aside his handsome, youthful face, he’s about as charming as, well, a former kidney doctor. Lai’s election could set up Taiwan for four more years of peace and prosperity. Or it could start a war that, as an opposition politician puts it, “opens the doors to hell.”

Here in the Republic of China—more commonly known as Taiwan, the self-governing island about 100 miles east of China that has Washington and Beijing contemplating the prospect of an unimaginably destructive war—he’s ahead of a surgeon, a detective and a billionaire in the polls.

With five months to go before January’s election, Lai has a little less than 40 per cent of the population’s support, an assertive but by no means commanding position in Taiwan’s turbulent politics.

That’s where these students, on their summer break, can help. About 50 of them have gathered in a meeting room at the headquarters of the ruling Democratic Progressive Party (DPP)—three floors of a nondescript building with low ceilings, bad Wi-Fi and surprisingly lax security—to share how they’re galvanizing the youth vote. When one group dedicated to Lai’s social media asks him to mimic a cute cat GIF for a selfie, the candidate raises a paw to oblige. More laughter ensues.

Then comes a sombre reminder of the election’s very serious stakes. “Many of today’s young people don’t understand how much of a fight it was to secure Taiwan’s democracy,” one young woman says. The kids in the room know, without needing to hear it, that there’s a chance they’ll have to fight as well.

Lai doesn’t flinch at that reality. Promoting Taiwanese identity is the foundation of the DPP’s almost four-decade-long existence, which has culminated in the current presidency of Tsai Ing-wen. (She cannot seek reelection because of term limits.)

Her administration recently lengthened the mandatory military service for men, to one year from four months; Lai has defended the contentious move as necessary to show Taiwan’s friends, chiefly the US, that the island is ready and willing to defend itself.

How would Lai explain to his two sons and grandson that they may one day need to fight?

“We grew up on this land, we should fight for this land—as much as we are able to—and ensure that Taiwan’s people can have fulfilling lives here for generations,” Lai tells Bloomberg Businessweek in a series of exclusive interviews in Taiwan, his first with international media.

Meeting at his childhood home, a campaign rally, DPP headquarters, the vice president’s residence and the Presidential Office, Lai comes across as less of a firebrand than measured and calculating. Even though his English is serviceable, he chooses to speak mainly in Chinese—the better, it seems, to watch his words. For him and everyone else, not upsetting Taiwan’s delicate status quo with China is a never-ending dance.

The subtle complexities that dictate Taiwanese politics will be on view during Lai’s mid-August state visit to Paraguay, one of the dwindling number of countries with which Taipei has diplomatic relations. (China flipped Nicaragua and Honduras in recent years, reducing Taiwan’s official diplomatic count to 13.)

The trip abroad will allow the vice president to artfully “transit” through the US with stopovers in New York and San Francisco, during which he’ll meet with officials from the American Institute in Taiwan, the de facto US embassy, as well as the Taiwanese American community. Visiting Washington or even taking a round trip to only the US is simply out of the question. When the US established formal ties with China four decades ago, it also agreed to end its recognition of Taiwan as a country; any action that seems to defy that deal—such as allowing the Taiwanese vice president to visit—risks provoking the Chinese government. For decades, China has viewed Taiwan as a breakaway territory it must absorb.

And yet, even with the threat of war ever looming, life in Taipei, the island’s economic, political and cultural centre, stands out for being surprisingly normal. The Raohe Street night market, a favourite culinary destination, is packed with food vendors doing a brisk business in oyster omelettes, stinky tofu and papaya milk. The Uni-President 7-Eleven Lions are neck and neck with the Wei Chuan Dragons in Taiwan’s top professional baseball league. And tickets have gone on sale to hear Sam Smith sing at Taipei Arena in October.

Taiwan is one of the most prosperous places in the world. Its semiconductor industry produces 90 per cent of the most advanced chips, making it integral to the global economy. The International Monetary Fund puts Taiwan’s per capita gross domestic product at almost $34,000, right behind Japan, ahead of South Korea and more than double China’s figure.

Yet just across the Taiwan Strait, China’s increasingly sophisticated military force could upend everything. Indeed, that reality is so easily forgotten that when there’s a reminder—the annual Wanan air-raid drill on an otherwise dull afternoon—Taipei’s ability to instantly shut down can be jarring.

“We don’t want to be enemies,” Lai says at the Presidential Office, one of the few times he answers an interview question in English. “As long as there is parity and dignity, our door is always open. We are willing to cooperate with China to advance peace and prosperity.” If Beijing doesn’t want to talk, in other words, that’s Beijing’s problem.

To Jennifer Welch, Bloomberg Economics’ chief geo-economics analyst, who was the director for China and Taiwan on the White House’s National Security Council until earlier this year, Lai saying his door is open is “not enough for the People’s Republic of China.”

Since Tsai became president almost eight years ago, Beijing has insisted that she, like her predecessor, must first affirm what’s referred to as the 1992 Consensus—a tacit agreement that suggests Taiwan is part of China. “The PRC wants the DPP to accept the 1992 Consensus, which the DPP has made clear it won’t do,” Welch says. So the silence continues.

War also remains unlikely, according to most analysts who study the region, even though former Speaker of the House Nancy Pelosi’s visit to Taiwan in August 2022 ratcheted tensions to a new high, reminding all sides just how much they have to lose.

A Chinese attack or naval blockade—successful or not—would result in a wave of sanctions to isolate China, putting at risk the miraculous economic growth that has secured the Communist Party’s grasp on power for seven decades. And it would thrust the US into conflict with a nuclear-armed rival, or leave Washington fumbling to explain why it didn’t intervene on behalf of a key partner. Joe Biden has said four times as president that he’d send US troops to protect the island.

And for Taiwan, an invasion would bring a devastating end to a period of extraordinary prosperity. Over the past half-century, the economy has grown almost sixtyfold, average life expectancy has increased by 12 years, and its companies have gone from making cheap goods such as toys and shoes to—like Foxconn Technology Group and Taiwan Semiconductor Manufacturing Co. (TSMC)—becoming some of the world’s most advanced manufacturers.

Even if war is unlikely, most analysts would also say it’s not impossible, a point dramatically underlined by Russia’s invasion of Ukraine. Although the analogy of Taiwan being Asia’s Ukraine has become popular in the US and Europe, thanks in no small part to Xi Jinping and Vladimir Putin declaring a “no-limits” friendship between China and Russia weeks before the invasion, it’s remained a controversial comparison in Taiwan.

To the DPP, Taiwan and its semiconductor industry are more important to the global economy than Ukraine. By that logic the US would surely defend the island, with troops if necessary, should the need arise.

The party has tried to strengthen Taiwan’s ties with the US and other “like-minded” democracies (strong unofficial allies such as Japan and Australia), so the prospect of them coming to its aid dissuades China from invading. Taiwan doesn’t need to compromise its sovereignty if it can depend on friends. “Peace is our destination, democracy is our compass,” Lai says. “We have no choice but to navigate bravely through this complicated situation.”

In a divide that largely defines the dominant contours of Taiwanese politics, supporters of the main opposition parties, the Kuomintang (KMT) and the Taiwan People’s Party (TPP), say Taiwan needs dialogue with China for peace and cannot depend on the US or anyone else to save the day; a vote for the DPP is a vote for war, they say. And it’s not only the absence of American troops in Ukraine that’s fed their doubts.

TSMC is the crown jewel of Taiwan’s economy; its success has instilled an almost nationalistic sense of pride here. Founded in 1987, the company is now the undisputed global leader in producing chips that can power everything from mobile phones to ballistic missiles.

That’s why, when TSMC announced last year it would invest $40 billion in two semiconductor fabrication plants in Arizona, its first such facilities in the US, some in Taiwan wondered how much American arm-twisting was involved. US Commerce Secretary Gina Raimondo has even said America’s reliance on Taiwan for chips is “untenable.”

This relatively new strain of political opinion in Taiwan—referred to as “American scepticism”—has added even more intrigue to the parlour game of Taiwanese politics. If enough of Taiwan’s cutting-edge chip technology came to the US, this reasoning goes, there’d be less motivation in America to protect the island against a Chinese invasion.

Foreign Minister Joseph Wu, who was appointed by Tsai, says many of these “conspiracy theories” about the US wanting only to take Taiwan’s chip technology are disinformation campaigns emanating from China. (The agency in Beijing that oversees China’s policy toward Taiwan didn’t respond to requests for comment.)

Whatever their origin, the suspicions about American intentions have become a flank Lai must manage in his campaign. Asked how he’d react if TSMC decided to build even more chip fabs in the US, and whether he’d try to stop them, Lai frames such a possibility in a broader geopolitical context. More TSMC semiconductor production in the US is a good thing, he says, demonstrating “an expansion of Taiwan’s economic power.”

The biggest beneficiary of American scepticism has been Ko Wen-je, a former surgeon who was the mayor of Taipei before founding the TPP in 2019. (He wasn’t available for an interview.) Ko has surged into second place, with an active presence on TikTok, where various videos feature him playing to supporters who wonder about US intentions.

Ko said in April at a forum at George Washington University that the interests of TSMC, Taiwan and the US government are not equal, and “we can only strike a balance when dealing with complicated issues like this.” The US considers it risky for TSMC to stay entirely in Taiwan, he said, and Washington would move what’s critical to its defence to America and keep the rest in Taiwan.

Lai comes from humble beginnings. When he was 2 years old his father died in a coal-mining accident; Lai’s mother, who never remarried, raised their six children by herself. “She was out of the house even before we got up” and wouldn’t return until after they went to bed, Lai says, sitting beneath a banyan tree outside his childhood home in Wanli. Here, on the rugged north coast, geopolitical chess matches feel a world away. Lai focused on his studies, attended the best schools and eventually became a doctor.

But cross-strait tensions with China escalated in 1996, and the DPP’s fierce stance on democracy inspired him to trade medicine for politics. “My mother did not approve,” he says. “But she loved me, and she said to me that if the people support what you’re doing, then continue doing it.”

Lai approached politics like a doctor wanting to address his patient’s problems. In Tainan, a southern DPP stronghold, he first became a member of the now-defunct National Assembly and then the legislature, winning reelection three times. In 2010 he became mayor.

According to Leo Wang, one of his longest-serving political advisers, Lai quickly focused on solving Tainan’s legendary traffic congestion by pushing ahead with a stalled tunnelling project. The mayor and his team went door to door until they’d persuaded almost 300 homeowners to move. Lai was persistent and perhaps unwilling to take no for an answer, Wang says. Or, in a less flattering light, maybe he was stubborn.

While mayor, Lai visited Shanghai in 2014—the only time he’s ever been to China. It didn’t go well. Speaking with professors and students at Fudan University, Lai was asked if the DPP would drop the goal of independence to facilitate dialogue with China. (The government has repeatedly pledged it would invade to stop Taiwan from formally declaring independence; there are no signs war is imminent.)

Another Taiwanese politician might’ve finessed a response, but Lai said the reason the party’s charter included this goal was that there was a consensus among the Taiwanese for independence; removing it was beside the point. Yeh Tse-shan, with Lai on that trip as the head of Tainan’s cultural affairs bureau, says that afterward the members of their delegation jokingly wondered if they’d be allowed to leave Shanghai.

The Shanghai visit isn’t the only episode that’s raised eyebrows. After serving as mayor and then premier, Lai decided to challenge Tsai for the DPP nomination before the 2020 election. Tsai, Taiwan’s first female president, hasn’t always found broad support for her domestic agenda. (A push to legally recognize same-sex marriages in 2019, for example, was controversial.) Although she was lagging in the polls to the KMT candidate, Lai’s challenge to the incumbent president struck many observers as insubordinate, and DPP voters stuck with Tsai in the primary. “Our culture is that, while we compete internally, we are united externally,” he says. Tsai ended up winning reelection in a landslide, with Lai as her running mate.

Tsai’s approach to China has largely won her plaudits in Taiwan and the US (less so in Beijing). Which is why Lai has presented himself as the continuity candidate to both Taiwan’s voters and the policy wonks in the US; he likens himself and Tsai to Biden and Barack Obama, saying he’ll continue her China policies and keep the same national security team in place when he takes office.

The opposition has responded by portraying Lai as having more extreme views than Tsai and saying tensions with China will get worse if he’s elected. They point to statements he’s made that seem to advocate seeking formal independence from China, such as when he visited Shanghai. Ask Lai if he’ll declare independence—he gets that a lot—and he’ll repeat a line adopted from Tsai: “Taiwan is already a sovereign, independent country called the Republic of China.” The “Republic of China” is an almost magical arrangement; that’s what China was called after the last imperial dynasty was overthrown in 1912. Using it keeps Beijing mum and lets Lai say Taiwan is sovereign and independent.

Sean Lien, one of the KMT’s three vice chairmen, offers a more evocative appraisal of the DPP: “They’re like the Taliban for Taiwan independence.” Lien, whose father, Lien Chan, ran twice unsuccessfully for president as the KMT candidate, has a sense of theatre when he speaks. Describing his own party’s candidate, the detective-turned-politician Hou Yu-ih, who’s polling third, he is similarly extravagant: “A Taiwanese version of Jack Bauer,” Lien says, referring to the hero of the television series 24. (Hou wasn’t available for an interview.)

One-liners aside, Lien is much more considered when asked whether the people of Taiwan would fight if China invaded. “We fight for our home, we fight for our land, we fight for our kids,” he says. “But we don’t fight for Taiwan independence.” That’s a sentiment shared by many. Surveys of the populace consistently find that more than three-fourths want the status quo to continue.

Perhaps no one has benefited from that status quo as much as Terry Gou, Foxconn’s founder, who made billions from city-size factories in China that produce most of the world’s iPhones, among other electronics. Gou, who lost the KMT nomination to Hou, has been toying with an independent bid but has yet to formally enter the race, perhaps because his China-friendly position makes his chance of winning minuscule. But he’ll no doubt direct his fiery rhetoric at Lai if he runs.

Writing in the Washington Post in July, Gou called for Taiwan to immediately start talks with China and said the DPP, Tsai and Lai had pushed the world to the brink of war.

Lai has made it a point to reassure people in Taiwan and the US that he’s a steady set of hands. “My responsibility is to maintain the status quo in the Taiwan Strait while protecting Taiwan and maintaining democracy, peace and prosperity,” he says. That’s why there’s no road map for formal independence, he emphasizes.

Still, it’s been hard for Lai to allay the concern that he may take more extreme positions than Tsai or even move Taiwan onto a path toward formal independence. As much as he pitches himself as the continuity candidate, it’s glaringly obvious that he and Tsai are very different people.

Tsai grew up relatively affluent; her father owned a car repair business when cars were still an item only the wealthy could afford. An academic who became a trade negotiator, she’d run only once—unsuccessfully—for public office before being named the DPP’s presidential candidate. Whereas Lai memorizes speeches but sometimes freewheels, Tsai is known for reading hers and never going off script.

The differences seem minor, but international relations may hinge on their implications. “Lai has sought to signal a great deal of continuity with the Tsai administration’s cross-strait and defence policies,” says Bloomberg Economics’ Welch. “But it’s also clear that he has his own beliefs and experience, which will shape his approach to the campaign and the presidency on these issues.”

As recently as July, when speaking with a group of supporters from eastern Taiwan, Lai—having gotten a little carried away by the crowd, according to an aide who asked not to be named—said he wanted Taiwan’s president to one day be able to walk into the White House and shake the American president’s hand just the same as the leaders of Japan or South Korea.

The comment caused a stir in Beijing and made the rounds in Washington as well. (The aide says it’s not something Lai will repeat.) This is the sort of talk that feeds the opposition’s narrative about Lai—that he represents an uncertainty that “opens the doors to hell,” as the KMT’s Lien puts it.

There’s plenty of time for chaos between now and January’s election, but Lai has a clear path to victory: He’s running against an opposition potentially split among as many as three different candidates. Even Lien says it’s concerning that the opposition may not be able to coalesce behind one candidate. That’s an election Lai can win.