Wednesday, April 22, 2015

Xi-Chu Summit

* Expectedly, Taiwan's ruling Kuomintang (KMT) Chairman Eric Chu will hold a summit meeting with Xi Jinping, Secretary-General of the Communist Party of China (CPC), on May 4 in Beijing.

* The meeting between the heads of the ruling parties on the two sides of the Taiwan Strait will take place just one day after the CPC-KMT Forum in Shanghai, during which Chu will participate as head of the KMT delegation.

* First began in 2005, Chu is following the precedent set by his predecessors--Lien Chan and Wu Poh-hsiung--in attending the inter-party forum. The annual forum has been an important platform between the two ruling parties. However, it has been subject to criticism recently by the opposition Democratic Progressive Party (DPP) for "monopolizing cross-Strait exchanges and subordinating cross-Strait relations to CPC-KMT ties."

* Since declining to run as a presidential candidate in the January 2016 contest, Chu now has more "latitude" to interact with the CPC without being labeled as "too close to Beijing" at home. The outcome of the upcoming Xi-Chu summit could have a direct impact on KMT's political fortune in the 2016 presidential and legislative races. In other words, it will be more than just a photo opportunity for Xi and Chu and the substance of the summit does matter.

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Friday, January 16, 2015

An Unilateral Move on Flight Routes

* In a surprise announcement on January 12, Beijing imposed four new flight routes--M503, W121, W122, and W123--that, Taipei believed, would threaten flight safety in Taiwan.

* Expectedly Taiwan's Civil Aeronautics Administration (CAA) and Mainland Affairs Council (MAC) voiced strong objection to China's unilateral decision to implement the new flight routes, starting from March 5, 2015.

* As cross-Strait relations are still reeling from the aftermath of ruling Kuomintang's (KMT) embarrassing electoral defeat last November 29, Beijing's decision on the new flight routes isn't helpful. Other than complete surprise, few in Taiwan could offer plausible reasons for Beijing to do what it did at this point in time.

* At the minimum, this unilateral decision will further erode the momentum behind President Ma Ying-jeou's engagement policy toward China, and it would give the opposition Democratic Progressive Party (DPP) legitimate grounds to challenge future attempts at reconciliation with a not-so-friendly neighbor across the Taiwan Strait.

Thursday, January 8, 2015

Taiwan High-Speed Rail Close to Bankrupt

* In an 18-0 vote, lawmakers across party lines joined forces and voted down the financial re-structuring plan, proposed by the Ministry of Transportation and Communications (MOTC), to save the Taiwan High-Speed Rail Corporation (THSRC) from going bankrupt.

* The MOTC's plan called for NT$150 billion for new locomotives and cars, and NT$200-300 billion to maintain operations over the next 50 years.

* Following the vote in Taiwan's Legislative Yuan (LY), Transportation Minister Yeh Kuang-shih, along with THSRC Chairman Tony C. Fan, submitted their resignations. Efforts are under way to persuade them to stay on.

* Though is has been the main transportation artery along the west coast of Taiwan, the high-speed rail project has been a controversial issue since it first began during 1992-93. From the technology to be applied to the amount of capitalization needed, the project has fallen victim to partisan bickering characteristic of Taiwan's domestic politics.

* Unless something is done to save the THSRC from going bankrupt, the government may be forced to take over this first large-scale BOT project in Taiwan.

Thursday, December 4, 2014

The Gap between Perception and Reality

* Despite suffering a devastating electoral defeat on November 29, the appointment of the former vice Premier, Mao Chi-kuo, to head the Cabinet as the next premier has been perceived by most that Taiwan President Ma Ying-jeou still wants to retain power for as long as possible.

* Worse yet, the "old-look" administrative team fell far below the general expectation that the ruling Kuomintang (KMT) would attempt to regroup with fresh faces and gain some traction amidst plummeting public support. It just didn't happen.

* Unless the KMT can regain credibility and confidence from the electorate--whether through policy or personnel reshuffle--in the next 12 months, the prospects are not particularly bright heading into the next legislative (January 2016) and presidential elections (March 2016).

* We expect progress, if any, in cross-Strait relations to move at a snail's pace in 2015.

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Tuesday, December 2, 2014

The Week After

* Following the devastating defeat on November 29, Taiwan President Ma Ying-jeou is expected to resign as ruling KMT chairman on December 3. Election for a new chairman will take place in roughly a month, around early- to mid-January 2015.

* Current Vice President Wu Den-yi and New Taipei City Mayor Eric Chu remain the frontrunners to succeed Ma as KMT chairman. In addition, Wu and Chu will likely vie for party nomination for the presidency next year. As such, intra-party unity remains a concern if the KMT wants to have a shot in the March 2016 presidential election.

* On the other hand, DPP Chairwoman Tsai Ing-wen has become the undisputed center of power in the opposition party. She is a shoo-in to win the DPP's presidential nomination for the 2016 race. 

* Under the current political climate, the DPP has a clear advantage over the KMT in the next presidential and legislative elections. However, the KMT is down but not out. The 2016 elections are still 15 months away, which is a lifetime in politics of any color. A lot can still happen.

* Beijing cannot be happy with the election results. While some cross-Strait exchanges will likely slow down, efforts to reach out to the DPP, though not party-to-party, will intensify. Ideological differences, however, will make the "getting-to-know-you" process difficult and the progress slow.