Combining Taiwan's presidential and legislative elections

l  Taiwan's Central Election Commission (CEC) decides last week to combine the upcoming presidential and legislative elections on the same day, now scheduled for January 14, 2012.

l  It’s long been the position of the ruling Kuomintang (KMT) to hold the two elections on the same day since: (1) the improved economic performance and (2) progress in cross-Strait relations are believed to help the ruling party in mobilizing the grassroots.

l  The opposition Democratic Progressive Party (DPP), on the other hand, has a different set of criteria when it comes to the same issue. The opposition will likely formulate its position based on: (1) who is the eventual presidential nominee for the opposition, and (2) how much of a boost to its legislative and presidential candidates if the two elections were held on the same day.

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Post-ECFA cross-Strait negotiations

l  Since the cross-Strait rapprochement first began in June 2008, there have been fifteen agreements, including the “Economic Cooperation Framework Agreement (ECFA),” signed between China and Taiwan. Despite the significant progress made in areas from transportation to tourism, however, the two sides have no “review mechanism” in place to examine the impact and evaluate the progress of these signed agreements.

l  As such, Beijing and Taipei plan to initiate an institutional dialogue at the deputy level—between the vice president of China’s Association for Relations Across the Taiwan Strait (ARATS) and the vice chairman of Taiwan’s Straits Exchange Foundation (SEF)—to monitor and assess these signed agreements.

l  Besides the ongoing negotiations on post-ECFA agreements, Beijing and Taipei have also agreed to conduct a review of the agreements on cross-Strait transportation links, financial services, tourism, and inspection of agricultural products. The two sides will likely adopt a step-by-step approach and review the 15 agreements in the order that they were signed.

l  Given what had transpired after the devastating earthquake in Japan, Beijing and Taipei have also agreed to begin discussions, possibly as early as this summer, for cross-Strait cooperation on nuclear safety, particularly in the areas of exchange of safety information, experience in plant operations, and the advanced warning system in case of accident.

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Controversy surrounding Kuokuang Petrochemical Complex

l  The lingering controversy over the planned Kuokuang Petrochemical Complex has forced presidential hopefuls, including President Ma Ying-jeou, DPP’s Tsai Ing-wen and Su Tseng-chang, to declare their positions on the future of industries like petrochemical that are considered risky for the environment.

l  The project was initiated by Kuokuang Petrochemical Technology Company—an affiliate of state-run oil refiner China Petroleum Corporation (CPC)—to expand oil refining capacity and the production of chemicals like ethylene. The justification behind the planned petrochemical complex was to increase Taiwan’s capacity in those areas and keep the island’s petrochemical industry competitive, especially against stiff competition from Japan, South Korea, and Singapore.

l  Over the past year, environmental groups claimed that the complex would create losses, particularly to the Dacheng wetlands and wild habitats it hosts, that outweigh its potential economic benefits. There were also concerns that the Kuokuang Complex would damage the local agriculture sector and pollute the surrounding environment, including water, while putting the health of local residents at risk.

l  On the other hand, many local residents and environmental groups were against building the petrochemical complex in Changhua County because of concerns over land cave-in. The county currently relies on groundwater for most of its water usage, which stands at 370,000 tons a year. The Kuokuang Complex, meanwhile, needs about 400,000 tons of water annually to operate, which will cause the county to pump up more groundwater and possibly lead to a deterioration of the land's stability.

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Presidential candidates "going nuclear"

l  Just two weeks into the presidential primary, Chairwoman Tsai Ing-wen of the opposition Democratic Progressive Party (DPP), also a contender, set off domestic debate on the safety of nuclear power and the future of nuclear plants in Taiwan with her statements on making Taiwan “nuclear-free” by 2025.

l  Because of the Fukushima Daiichi nuclear facility accident, there’s been heightened awareness within Taiwan on: (1) the safety of the four—three in operation and one under construction—nuclear power plants in Taiwan, (2) the precautionary measures that the government has taken in case of an accident, and (3) the necessity of continued use of nuclear power on the island.

l  Because of the upcoming legislative and presidential elections, however, the ongoing debate on nuclear safety has been easily politicized, and again, it has become a matter of position, not science.

l  Like many places around the world, the issue of nuclear power has always been controversial in Taiwan. Because of the rising electricity demand during the years of economic takeoff, nuclear power has always been an important source, which now constitutes roughly 12%, of Taiwan’s electricity supply.

l  With heightened concern over environmental protection in the 1970s, however, there have been many protests—big and small—throughout the island against the continued use of nuclear power on the island. The nuclear controversy reached a feverish point in June 2000 when then-President Chen Shui-bian (CSB) made the surprise decision to suspend the construction of the Fourth Nuclear Power Plant, which proved later to be politically costly for both the DPP and CSB.

l  In a recent meeting with local press, Tsai put forth plans to make Taiwan a "nuclear-free homeland" by 2025, which sparked criticisms from the ruling Kuomintang (KMT) and her rival in the DPP, former Premier Su Tseng-chang. As Tsai later tried to clarify her position that “a nuclear-free homeland by 2025” was fundamentally different from the abrupt suspension of construction of the Fourth Nuclear Power Plant in 2000, she plans to announce concrete, substantive steps would lead to a "nuclear-free homeland" by 2025.

l  It is believed that Tsai will propose measures to increase the supply of non-nuclear power, make the use of electricity more efficiently, reduce electricity consumption and waste, and gradually lower Taiwan's reliance on nuclear power.

l  No matter who wins the ongoing debate over nuclear power, or who captures the DPP presidential nomination, the controversy surrounding the continued use of nuclear power in Taiwan will likely remain a crucial issue in the coming presidential campaign.

l  While some believed Tsai’s proposal of a “nuclear-free homeland” was both premature and impractical, it nevertheless raised public concerns over not just the necessity for the continued use of nuclear power, but a coordinated national energy policy that would, among other things, encourage the use of alternative energy and conduct frequent review of nuclear power safety at the different plants.

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Time to get serious about "Going Green"

l  With rising oil prices and the Taiwanese public becoming more concerned over nuclear safety, a “Green Trade Project Office” (GTPO) was recently established to promote Taiwan’s green products and improve its image in the global green trade sector.

l  The office, under the supervision of the Ministry of Economic Affairs (MOEA), plans to start a three-year project this year that will focus on industrial counseling, manpower training, and marketing of the green trade between Taiwan and other trading partners, including China.

l  The powerful earthquake that hit Japan last month has again raised public awareness and reminded people of the importance of dealing with the global greenhouse effect and reducing carbon emissions, as well as fostering green growth in Taiwan.

l  The MOEA plans to initiate programs for a year-on-year growth of 20 percent of Taiwan's green product exports starting this year, which is higher than the 10-percent-growth forecast for the island’s overall exports in 2011.

l  In 2009, Taiwan's green product exports totaled US$11.8 billion, accounting for just 5.8 percent of the country's total exports and representing a meager 5-percent share of the global green product market. China has been the leading destination for Taiwan's green products, absorbing US$3.42 billion worth, followed by the European Union at US$2.26 billion, the United States with US$2.25 billion, Japan at US$450 million, and Hong Kong with US$300 million.

l  With government's continued efforts to promote the island’s green products and trade, more cross-Strait cooperation in solar, wind, and other alternative sources of energy are expected in the coming years.

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Beijing's outreach to the DPP continues

l  Former Kaohsiung County Magistrate Yang Chiu-hsin, formerly of the DPP, led a delegation to China last month and met with top Chinese officials, including the Director of the Taiwan Affairs Office (TAO) Wang Yi and Chairman Chen Yun-lin of the Association for Relations Across the Taiwan Strait (ARATS), responsible for cross-Strait relations.

l  Though it’s no secret that a number of former DPP officials and pro-opposition scholars have visited China since 2008, those trips were very low-key and mostly not reported in the press, unlike Yang’s much-publicized visit in late March.

l  Moreover, while Yang is no longer a part of the DPP, his trip to China was largely perceived as another step forward in Beijing’s outreach to those in the opposition. This strategy will likely continue in the foreseeable future as Beijing hedges against the possible return to power by the DPP.

l  Though Yang had been to China on three previous occasions, the visit this week carried added political significance as Beijing, from now until the 2012 presidential election at least, plans to: (1) emphasize exchanges and interactions with people, things, and places in southern Taiwan, (2) enhance understanding of the opposition through meetings with former DPP administration officials and pro-Green scholars, and (3) expand cooperation with DPP-controlled cities and counties throughout the island, particularly in agricultural trade and infrastructural investment. However, a party-to-party platform between the Communist Party of China (CPC) and the DPP appears unlikely, at least not until the presidential election is over next year.

l  In addition, Beijing will broaden contacts with Taiwan’s grassroots and project a more benevolent image contrary to those often associated with Chinese missile threat and pressure on Taiwan’s international space. Therefore, it is almost certain that Beijing will have more procurement delegations visiting southern Taiwan this year, and after the signing of the mutual investment protection agreement, there will likely be more Chinese investments in places considered the DPP’s strongholds.

l  As Beijing shifts its policy focus to southern Taiwan this year, there will also likely be reciprocal changes in the DPP’s position toward China. Other than the occasion rhetoric to keep the fundamentalists happy, the DPP’s presidential nominee—either Su Tseng-chang or Tsai Ing-wen—will present a more moderate cross-Strait policy.

l  More importantly, the fifteen signed agreements since 2008, including the “Economic Cooperation Framework Agreement” (ECFA), will probably continue to be honored by the new DPP administration if it wins the presidential election next year. Therefore, the likelihood of a national referendum on the fate of ECFA, as once pledged by DPP Chairwoman Tsai Ing-wen, has become increasingly remote since the political costs would be too much for any political leader in Taiwan to shoulder.

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DPP's 2012 presidential primary

l  Following the announcement last month by former Premier Su Tseng-chang to seek the presidential nomination of the Democratic Progressive Party (DPP), the opposition appeared set for the month-long presidential primary to nominate the “most likely to win” candidate, opposite President Ma Ying-jeou from the ruling Kuomintang (KMT), in the 2012 showdown.

 l  Besides Su, DPP Chairwoman Tsai Ing-wen has also made public her intentions to run in early March and filed the necessary papers with the party headquarters. The two candidates are expected to travel extensively throughout the island in the next three to four weeks before the DPP conducts three independent polls, now scheduled for April 25-29, to decide on the nominee. An official announcement is set for May 4.

l  The DPP’s presidential primary has long been expected to be a contest between Tsai and Su. As such, the last-minute surprise registration by former DPP Chairman Hsu Hsin-liang to become a presidential candidate would have very little, if any, impact on the outcome.

l  Hsu, who first broke away from the DPP and became an independent candidate in the 2000 presidential contest, is fully aware that his chances of winning the nomination are, at best, remote. However, since he would like to make the DPP primary more issue-oriented, Hsu pans to “force” both Tsai and Su, through his participation, to address many pressing issues facing Taiwan and each present a blueprint on managing affairs of the state—from wealth distribution to cross-Strait relations—if the DPP returns to power next year. Hsu is, therefore, expected to be very vocal and assertive in the next few weeks.

l  As for the competition between Tsai and Su, it will mostly be a contrast of personality, style, and, of course, policy. While Tsai is expected to emphasize the need for a generational change in the DPP leadership, Su will remind supporters the value of his vast experience and record in office, particularly during the seven years when he was the Taipei County (now New Taipei City) magistrate.

l  In addition, Su plans to draw attention to the efforts and commitment he made to the opposition movement during its formative years, which made freedom and democracy possible for the younger generations of DPP politicians, including Tsai, to enjoy today.

l  On the other hand, Tsai will highlight her success in reviving the DPP and rejuvenating morale following its embarrassing defeat in the 2008 presidential race and how she was able to record consecutive election victories against the KMT with limited resources. At the same time, as the youngest contender at 54, Tsai plans to present a new vision for the DPP, one in which the party moves away from ideological confrontation of the past and present itself as a credible, viable alternative to the KMT in the years ahead.

l  Furthermore, since she is aware that others will question her for her inexperience and the “lack of administrative accomplishments,” Tsai will likely try to appeal to those 45 and under since these “young stakeholders” are more interested in what a candidate can offer for the future, not dwell on the past. According to various estimates, the number of first-time voters, or those who did not qualify to cast ballots during the 2008 elections, is estimated to be around one million, which will represent a significant voting bloc that no one, including KMT’s Ma, could afford to ignore in both the 2012 legislative and presidential poll.

l  Immediately after the formalization of Tsai’s and Su’s candidacy, a leading local news publication, the China Times, published results of its survey on the level of support for the three prospective presidential candidates—Su and Tsai from the DPP and Ma of the KMT—in the 2012 presidential showdown. With roughly nine months left in the campaign, Ma is ahead of both Su and Tsai by 6 percentage points each.

l  Though the difference separating the candidates was bigger than the margin of survey error, it is too close for the KMT and Ma to sit comfortably on this narrow lead. The economy will remain the key for Ma and the ruling KMT.

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