How Taiwan 2024 Elections Test Geopolitical Status Quo

The 2024 Taiwan presidential election holds significant importance as it not only determines the next president of Taiwan but also has broader implications on Taiwan’s geopolitical status, cross-strait relations, and global dynamics.

The election outcome will also affect the delicate balance of cross-strait relations between Taiwan and China. The stance of the new president on Taiwan’s sovereignty and relations with Beijing will have implications for the security and stability in the Taiwan Strait region. For example, keeping the status quo means not actually declaring indepence by name. If that were to happen, then China could use it as an excuse to begin an invasion or start more agressive tactics. The candidates’ stances on Taiwan’s relationship with Beijing and the issue of independence versus reunification with mainland China are critical factors shaping the political landscape and public sentiment.

Support for reunification with China is quite low at about 10%. Thus, 90% plus support indepence. The key question will be what kind of independence? The status quo independence or actually declaring indepedence which is mostly sybollic. Important for Taiwan but this would be an issue for both China and the US. The US is opposed to a Taiwan declaration of independence as well as Chinese military action.

For many Taiwanese, the fate of Hong Kong destroyed a faith in the promise of ‘one country, two systems.’ Thus, prior Chinese actions have pushed the Taiwanese away politically from the mainland and this was counterproductive for Chinese interests.

If that were to happen, it could influence the position of other countries and international organizations on Taiwan-related issues, including its participation in global trade agreements.

Who are the key players in the 2024 Taiwan presidential election?

The 2024 Taiwan presidential election features key players from both the Kuomintang (KMT) and the Democratic Progressive Party (DPP), along with emerging candidates and their platforms. The KMT has put forth prominent figures such as Hou Yu-Ih and potential frontrunners, positioning themselves as viable contenders in the presidential race. The DPP, the ruling party, has its own strong contenders, including key figures like Tsai Ing-Wen, who is the incumbent president, and Lai Ching-Te, who is expected to play a crucial role in the upcoming election. Tsai lng-When faces term limits and cannot run for president again, thus Lai Ching-Te has become the presidential candidate representing the DPP.

The key differece between these two major parties from a geopoligical point of view is that KMT generally desires closer ties to China with possible talks of reunification. In contrast, the ruling party DPP, favors more independence and closer ties to the US.

A recent survey in the Economist on the 19th of December, had Lai (DPP) at 34% and Hou (KMT) at 31% plus another 21% as their potential prefrerence. Since then it the race has become even closer.

Additionally, emerging candidates from various parties bring diverse platforms and visions for the future of Taiwan, adding complexity and competition to the electoral landscape. The race is too close to call and coalition dynamics would come into play post-election.

What are the main issues and concerns in the 2024 Taiwan presidential election?

The main issues and concerns in the 2024 Taiwan presidential election encompass economic policies and trade agreements, relations with Beijing, and the issue of Taiwan independence.

Candidates’ approaches to economic policies, trade agreements, and international economic cooperation are central to the election discourse, particularly in the context of Taiwan’s economic growth and global integration. Taiwan and China are interdependent with lots of trade and FDI. In addition, Taiwan is the has dominance in semiconductor manufacturing controlling about 60% of the market, but more importantly 90% of the high-end chip market. To make this more resilent, Taiwan has agreed with allies such as the US, to build advanced semi conductor plants in the US etc.

Potential Geopolitical Impact on Market

A declaration of indepence would certainly rock the financial markets as this would be seen as an escalation by China. The odds of President Xi of China being forced to respond with either significantly more threats and even war would increase dramatically. We would expect the semiconductor industry and companies that rely heavily to drop more than the general market.