Off to the Races.....

* The opposition Kuomintang (KT) is expected to draft and nominate a presidential candidate on May 17. Among the two leading contenders, most believe New Taipei Mayor Hou You-yi will get the nod next week. However, since the two are neck-to-neck in most opinion polls, it remains to be seen how the KMT would reconcile differences, and possibly divisions, caused during the party primary.

* No matter who gets the nomination, it will be a tough uphill battle against the current vice president and presidential nominee of the ruling Democratic Progressive Party (DPP), William Ching-Te Lai. Besides being the incumbent vice president, Lai is ahead in most polls by a margin of 5-8 percentage points. Following the KMT's formal nomination, however, the margin is expected to shrink, though not significantly.

* KMT's other presidential contender, Foxconn founder Terry Gou, is doing his best to earn the trust of the party's rank-and-file. In fact, many party die-hards still hold grudges against Gou for breaking with the party in 2020 after failing to secure nomination. Gou has publicly apologized for what transpired four years ago, but it remains a bitter pill for the grassroots to swallow following suffering a devastating defeat four years ago.

* The knock on New Taipei Mayor Hou rests on his lack of experience in managing international and cross-Strait relations. With a career in law enforcement, Hou only got into politics in 2010 after becoming New Taipei City's vice mayor, and eventually was elected mayor in 2018. He has never been known for strong ideological orientation, hence the deep-Blue (KMT's fundamentalists) doesn't expect him to pursue KMT's traditional stance on cross-Strait relations, e.g. the acceptance of the1992 consensus. This may indeed be the key to how the non-partisan and middle-of-the-road voters would cast their ballots on January 13, 2024.

Measures to Stimulate Taiwan's Economy

* Taiwan's export continued to decline in Q1 2023. With economic and geopolitical uncertainties abound, there is not indication that the world economy will rebound anytime soon. As a key player in the global supply chain, sluggish performance will likely continue for Taiwan's export-oriented economy.

* For a report on the recent measures by Taiwan government to stimulate local economy, please see: https://www.scmp.com/economy/global-economy/article/3219533/taiwan-doubles-down-stimulus-halt-recession-tourist-handouts-cash-citizens, including Dr. Raymond Wu's commentary.

 The message behind the numbers

* Though the counting continues, US midterm elections concluded on Tuesday. Democratic Party bucked both history and prevailing sentiments suffered minimal losses in the House of Representatives, with the control of the Senate not to be determined until the run-off election in Georgia on December 6.   

* US voters clearly rejected extreme politics mostly identified with Donal Trump. Many of the GOP nominees closely aligned with Trump lost--some poorly--and the much anticipated "Red Wave" did not happen. Though the GOP may capture the control of the House, albeit by a much smaller margin, in the end, the maneuvering room for legislative agenda-setting is much more limited for the next Speaker.

*  Led by Florida Governor Ron DeSantis and Michigan's Gretchen Whitmer, the rise of younger political leaders in both major parties have opened the door for a 2024 presidential showdown where both President Joe Biden and Donald Trump are no longer in the lead. There are a lot of variables before the dust settles for the 2024 election, and no one should rule out an encore performance by Biden and Trump when the nomination processes are concluded in the summer of 2024. 

 What Happened to Peace-Building?

* 2022 has been a turbulent year. Though the world is slowly returning to normal after a three-year bout with COVID-19, geopolitical tensions--from Europe to Asia--have heightened risks of armed conflict few, if any, expected. Looking back, none was prepared for what transpired since the Russian invasion of Ukraine in February.

* With the world clearly divided along ideological lines, countries around the globe are running out of "excuses" not to take a side in the quickly changing geopolitical map. No one, at least not outwardly, wants Cold War 2.0, but few are doing anything to alter the projected course and avert the potentially disastrous outcome.

* Besides the ongoing war in Ukraine, many believe the next possible geopolitical conflict could happen in the Taiwan Strait, especially since U.S. House Speaker Nancy Polosi's highly publicized visit to Taipei in early August. While it was a welcomed gesture of the longstanding friendship between the U.S. and Taiwan, the threat of a military conflict has risen exponentially with China staging military exercises around the island and daily jet incursions in the double digits.

* Given the number of official delegations visiting the island since, the taboo once forbidding visits by foreign officials and dignitaries to the island can no longer hinder the continued internationalization of the Taiwan issue, which has long been regarded by Beijing as a "no-no." With heightened likelihood of an a military conflict, Taiwan has taken steps to beef up its defense and military preparedness, including, but not limited to, the purchase of arms from the US and the extension of military training, not conscription, from the current four months to one, possibly two, year.

* Lost in the shuffle between, among other things, the arms buildup and elevated military alertness on the island is the effort to deescalate tensions through the restoration of long-suspended dialogue. Though the continued peace and stability in the Taiwan Strait remains the shared interest of all parties concerned, no one--Washington, Beijing, and Taipei included--is doing anything down that avenue. Besides paying mere lip service, few efforts, if any, are devoted in that endeavor, making the prospects of a cross-Strait armed conflict, once unthinkable, unavoidable in the coming years.

* The attention now turns to the proposed Biden-Xi meeting during the G20 Summit. Even if the anticipated summit does happen, few would expect significant breakthroughs in the US-China relations that first began deteriorating when Trump was in office. So much has happened in this vital relationship that few would expect any noticeable improvement with one single meeting.

A Breakthrough Worth Waiting For

 * News broke early this morning that both FoxConn founder Terry Gou and Taiwan Semiconductor Manufacturing Corporation (TSMC) have each signed a sales agreement with Shanghai's Fosun Pharma to purchase ten million does collectively of BNT (Pfizer) vaccines. The vaccines will be donated to Taiwan's public health agencies for distribution.

* Undoubtedly this is a timely boost to not only the DPP administration's ongoing fight to contain the COVID-19 outbreak, but also the public's morale and confidence in Taiwan. Although the island remains under level-three alert until July 26, the outlook appears brighter as the pace of vaccination intensifies in the coming weeks. 

* Though the delivery date is yet to be ascertained, the vaccines will likely be applied first to students--those age 12 and above--as the fall semester is set to begin in September. Once the vaccines have arrived, the rate of vaccination will determine how quickly schools can begin in-person learning, which will be critical in the island's return to per-outbreak normalcy.

* Though uncertainties remain, the apparent success of FoxConn and TSMC has blazed a trail for local governments, as well as other corporate and civic organizations, attempting to secure more vaccines to protect the island's 24 million people. The well-known buddhist organization, the Tzu Chi Foundation, have also entered into agreement with the DPP administration to procure another five million doses of BNT vaccines. Therefore, the island's once vaccine shortage should be well addressed within the next three months.

* How well, and how quickly, the DPP administration can contain the ongoing outbreak will bear directly on the 2022 mayoral elections, and possibly the 2024 presidential race. The ruling DPP might have lost a few battles since the outbreak in mid-May, but it's not preordained for an electoral defeat next year. There is still time for President Tsai and the ruling party to recover, especially since the opposition parties like the Kuomintang (KMT) have not made significant stride in the latest public opinion surveys.