Tag Archives: Ma Ying-jeou

Pres. Ma makes case for trade pact with China

Taiwan’s President Ma Ying-jeou held a press conference on February 9th to explain the reasoning behind his administration’s policies concerning the negotiation of the Economic Cooperation Framework Agreement (ECFA) with China. He said the pact would include measures focusing on tariff reductions and exemptions as well as legal protection of investment and intellectual property rights. The overall aim is to boost Taiwan’s competitiveness.

President Ma expressed his worry that Taiwan’s competitiveness will be adversely affected by free trade agreements (FTA) between the members of the Association of Southeast Asian Nations (ASEAN) and China, which from January this year reduced customs duties on 90 percent of trade between some of the countries.

In order not to be left behind, Taiwan needs an ECFA with China, according to Ma. There has been huge change in Asia over the last decade. In 2000, there were only three FTAs signed in the region, but by 2009 the number had increased to 58. Only Taiwan and North Korea are yet to sign an FTA.

Three key issues to ECFA

An ECFA with China would stimulate foreign direct investment in Taiwan and assure that the island is not marginalized in the region. An ECFA should also help create more job opportunities for Taiwanese people by addressing tariff reductions, the protection of investment and intellectual property rights.

First is the matter of tariff reductions and exemptions. In 2008, bilateral trade reached over US$130 billion, with Taiwan exporting US$100 billion-worth of goods to China and importing US$32.5 billion from the mainland. With low or zero tariffs, Taiwan would benefit from increased export volumes.

Second is the need for investment protection. An estimated 100,000 Taiwanese businesses have invested in China, with the total investment topping US$80 billion. Taiwan needs a comprehensive set of measures to safeguard the island’s business interests when they encounter unfair or unjust treatment in China.

Third is the protection of Taiwanese intellectual property rights, including trade marks, patents, and special processing and innovations. Through arrangements under an ECFA, Taiwanese firms would be able to avoid becoming the victims of Chinese pirating.

President responds to public concerns

In addressing concerns that an ECFA might hurt certain domestic industries, Ma said that the government has formulated three types of assistance program to help offset the impact. “Rejuvenation” assistance is aimed at helping industries that are at risk but have not yet been hurt. “Systematic adjustment” assistance is aimed at improving the operations of industries that have begun to suffer, though not as heavily. In the case of industries experiencing severe setbacks, a “damage relief” program administered by the Ministry of Economic Affairs will provide assistance up to NT$95 billion (about US$3 billion) over a 10-year period.

In response to concerns that Taiwan will allow mainland labor and agricultural imports, the president underscored the fact that agreements under the World Trade Organization framework do not address movements of labor, and it will not be included in these cross-strait negotiations.

As for agricultural products, he pointed out, whereas the previous Democratic Progressive Party (DPP) administration had lifted restrictions on the import of 1,415 types of mainland products, his administration has not lifted restrictions on even a single additional category of agricultural goods.

As for the DPP’s suspicions that China harbors political designs to use economic agreements to make Taiwan more dependent, President Ma said the surging growth of Taiwan’s trade with China and investment there is normal. It is in keeping with China’s place as a factory to the world and its ballooning worldwide trade.

Talk on ECFA gains momentum

According to the Central News Agency, Premier Wu Den-yih said on March 6th that Taiwan and China hope to sign ECFA in May or June, depending on the progress of the negotiations. Both sides will have to negotiate on their “early harvest” lists, which refer to the industries and services on both sides that will be granted immediate tariff concessions or more liberal trade terms under the ECFA, Wu noted.

Momentum seems to be building on China’s side for the negotiation to be concluded, following the first round of talks that was held in late January. The second round of ECFA talks is slated for late March in Taipei.

Who wins with ECFA?

Taiwan and China have begun negotiating the details of the FTA-like Economic Cooperation Framework Agreement (ECFA) with a hope of scheduling an official meeting this May or June. Among the important preliminary items under discussion are Taiwan’s petrochemicals, textiles, mechanical equipment products and automobiles entering China tariff free. As the main source of Taiwan’s foreign exchange, these four industries create total exports worth NT$280 billion (US$8.75 billion), accounting for 30 percent of Taiwan’s total exports.

Commonwealth monthly reported that in order to minimize the holdups in the official negotiation process, the associations of these four industries have had their chairmen working with China since 2009. According to these businessmen, they have done their part in the give-and-take negotiations with their counterparts, and now await the formal announcement of negotiations between the two governments.

Petroleum, textiles seek equal footing with ASEAN

The petrochemical industry accounts for 20 percent of Taiwan’s total exports. In all, 40 percent of Taiwan’s petrochemical exports head to China, making that country the island’s biggest market. Most of Taiwan’s petrochemical exports are in upper string raw materials that are sent to China for processing. As an example, Formosa Plastics Corporation has a fleet of vessels to ship raw materials from its complex in Mailiao, Yunlin County, to production facilities in eastern China for further processing.

For the petrochemical industry, the most important issue is not the quality, but fast delivery and competitive costs. The addition of tariffs in China would have an enormous impact on Taiwan’s petrochemicals. Starting from January 2010, ASEAN member countries now enjoy zero tariffs on their petrochemical exports to China, meaning that Taiwan’s petrochemical raw materials are now priced 5 to 10 percent higher than those of ASEAN members.

For all intents and purpose, the textile industry is lumped with the petrochemical industry. Taiwan Textile Federation sent a delegation led by W.U. Wang, executive director of Formosa Chemicals and Fiber Corp., to sign a memorandum with his Chinese counterpart in July 2009. There they learned that almost half of Taiwan’s textile exports might enjoy zero tariffs once the ECFA takes effect.

The significance of the ECFA does not lie in increasing the strength of Taiwan’s petrochemical industry, but in achieving an equal footing with the ASEAN nations. It is also crucial for the petrochemical industry to retain the supply chain in Taiwan. Wang said by maintaining similar competition conditions, the ECFA will prevent Taiwan becoming more dependent on China.

Mechanical equipment Industry depends on China

Like petrochemicals, Taiwan’s mechanical equipment industry is also heavily dependent upon exports, which account for 60 percent of total exports. China is the also the largest market for Taiwan’s mechanical equipment products, receiving 30 percent of Taiwan’s total exports in this sector.

For the mechanical equipment industry, the ECFA would not only reduce the tariffs of exporting to China, but the agreement could mean that Taiwanese firms might set up manufacturing plants in China. Operating in Taiwan has all the advantages except Taiwan’s real estate is more costly and is also farther from the end-market consumers.

The mechanical equipment industry maintains a complicated supply chain. While in Taiwan, all the sub-contractors are within a 50-kilometer range, in the mainland, they are spread across hundreds of kilometers. Mechanical equipment is heavy and costly to transport by land. For Taiwan, transportation costs could be reduced and delivery speeded up if items were shipped by sea instead of over land. This is why only 20 percent of the mechanical equipment businesses invest in facilities in China. With the ECFA in place, Taiwanese firms would take advantage of lower costs in China to increase their global market share.

Auto sales shrinking

Unlike the petrochemical and mechanical equipment industries, Taiwan’s auto-makers are facing shrinking sales, estimated at 300,000 cars annually. With such a small market, they can’t afford to develop brand names and must count on promoting joint ventures with foreign companies to reduce production costs.

For the auto industry, the ECFA would help simplify the sale of 12 million Taiwan-made cars to China annually. Chen Guorong, general manager of Taiwan’s Yulon Motor, told Commonwealth that the ECFA offers an opportunity for Yulon to cooperate with China’s Geely Automobiles to develop a lower priced car. Yulon plans to import cheap Chinese auto components for assembly in Taiwan, with 40 percent added value to sell in Taiwan or export to other markets. This would convert ‘Made in China’ to ‘Made in Taiwan.’

However, Chen also understands that the ECFA poses a risk of converting Taiwan’s market into a part of the Chinese market. For example, after the merger of markets across the Taiwan Strait, Nissan, which has had a long term partnership with Yulon, might stop production in Taiwan, and only manufacture autos in China for export to Taiwan.

Japan and Korea poses greatest threat

Although these four industries have their own reasons for promoting the ECFA with China, their real intention is to block stronger competitors of Taiwanese goods – Japan and South Korea. A high ranking manager in the petrochemical industry said, as a matter of fact, Taiwan is not afraid of ASEAN plus one (China). The real threat to Taiwanese industry is Japan and Korea plus one (China).

In the face of China’s rising market, the largest in the world, Taiwan’s main strategy is to sign an ECFA with China before Japan and Korea, thus gaining a competitive edge over those two countries. This is one reason Japan and Korea have been avidly watching the ongoing progress of the free trade agreement developments between Taiwan and China.

Who do Taiwanese people trust most?

According to the March issue of Taiwan’s Reader’s Digest, Master Cheng Yen of the Buddhist Tzu Chi Foundation tops the list as the most trusted person in Taiwan. She held a huge 22 percent lead over Lee Chia-tung, the former president of Chi-nan University, who placed second. She was followed by President Ma Ying-jeou in third, Dr. Henry Lee (US-based forensic scientist) in fourth, His Eminence Paul Shan Kuo-hsi, S.J. (Roman Catholic Church Cardinal) in fifth and Master Aki (grand chef of the national banquets) in sixth.

The top choices

Known as the “Asian Mother Theresa,” Master Cheng Yen founded the Buddhist Tzu Chi Foundation in 1966 with a commitment to promote the religious spirit of charity. After every major disaster in Taiwan, Tzu Chi volunteers are first to arrive on the scene to help. With a vast number of volunteers, they are able to match – if not surpass – government agencies with their efficiency in rescue and relief work. Even in remote corners of the earth, Tzu Chi volunteers are often the first to send medical assistance. Master Cheng Yen’s name has been put forward for the Nobel Peace Prize, notably, by the 2008 Nobel Prize winner in Physiology or Medicine Harald zur Hausen who believes she is the most qualified candidate for the honor.

The Digest’s multiple-choice survey polled Taiwanese people about a range of areas. With respect to public welfare, unselfish and high morals, and professionalism, Master Cheng Yen ranked first. She was followed by Cloud Gate Dance Theater founder Lin Hwai-min (5), former president Lee Chia-tung of Chinan University (7), and “the forever civil servant on TV” Chang Hsiao-yen (10). All are long-term volunteers in public service seen to bring social stability.

Others receiving a high degree of trust included movie director Ang Lee (3) and former US Major League Baseball player Wang Chien-ming (8). They are considered to be persistent, focused and highly idealist. Professor Li Ding-chan of The Institute of Sociology in Tsinghua University said. “The top ten are all outstanding professionals and long-term hard workers in their professional fields. They all have the attitude of dedication and stability, no negative news or tricks, thus winning the trust of the people.”

Money does not equal trust

Comparatively speaking, those associated with “monetary power” ranked lower. In particular, entrepreneurs’ reputations of being trust-worthy took a beating in the face of the global financial crisis. According to Liu Wei-kong, an associate professor of sociology at Soochow University, “In the last year’s financial turmoil, the public showed antipathy for the money game; and the decoupling of social wealth and social responsibility led to low public trust in entrepreneurs”

The only person that bucked this trend was Morris Chang, chairman of the Taiwan Semiconductor Manufacturing Corp., who ranked in ninth place. Although a business owner, Chang gives the impression of honesty. Once at a shareholders’ meeting, Chang warned investors that wafer prices for the next quarter would not be good, asking investors to be conservative.

Foxconn chairman Terry Gou is also ranked in the top 20 at number 14. According to Liu’s analysis, Gou has been actively engaged in public service. “His performance after Typhoon Morakot in August 2009 was better that that of the government. He has a reputation as the Bill Gates of Taiwan.”

Media prominence does not equal trust

In the Digest’s survey, the low rankers were politicians, talk show hosts, TV pundits and entertainers. Professor Ku Chung-hua of National Cheng Chi University pointed out, “Taiwan’s journalists have their own political stand points, and the media relates sensational news to high ratings. This is the reason why they fail to win public trust.” Chang Ly-yun, researcher at the Institute of Sociology at Academia Sinica, said, “It is a great irony. The media, which control public opinion in society, and the politicians, who control the operation of the government, should be trusted by the people because they are all involved with public interests. Instead, they occupy the lower rankings.”

At the same time, being a popular artist does not mean they are trusted. Jay Chou, once named “Asian Little Superstar” holds 52nd place. “You can see the good or bad reputation of the media from Jay Chou’s ranking,” said radio host Wang Tzu-sou. “Why should Jay Chou, who was listed by CNN as one of Asia’s 25 most influential people in the world, get such a low ranking? One of the possible reasons is that he has been tarnished by his many romantic scandals. So regardless of how prominent you are, once you hurt your image, your credibility is also discounted.”

Former presidents trailed at the bottom

According to Reader’s Digest, the survey asked respondents to make a single choice among the most trusted figures, Master Cheng Yen was again ranked first and the national banquet chef Aki came in at sixth place. These rankings did not change, but President Ma Ying-jeou’s ranking jumped to third from 37th place. Political commentator Nanfang Shuo said that this is because Ma enjoys national visibility. In the multiple choices survey, Ma is ignored because respondents picked others, but in the single choice survey, respondents remembered him. It is interesting to note that in the multiple choice survey, former President Lee Teng-hui ranked 75th while another former President Chen Sui-bian came in last at 80th.

Japanese-American scholar Francis Fukuyama said in his book Trust: The Social Virtues and the Creation of Prosperity that trust is a form of social capital, and only a high degree of trust in society can lead to the creation of higher economic prosperity. Professor Ku agrees that Taiwan’s social trust is indeed in fragile shape, but the operation of a modern society depends on the political and economic systems, not on an individual. “So, trust in individuals is full of risks, not as good as the trust in a system.” Ku said that if social trust has been low for a long time, the economy will not recover easily.

In the survey, the Reader’s Digest listed 80 celebrities from all walks of life in Taiwan and asked respondents to pick those they trusted most. The survey was conducted by Digital Edge, which sent out 16,200 e-mails and received 1,003 responses. The final tally was taken from 760 valid responses in late October 2009.

Taiwan’s Haiti relief efforts praised

Almost a month ago Haiti experienced a magnitude 7.0 earthquake that left the capital, Port-au-Prince, in ruins. Besides causing death and destruction on a massive scale, the earthquake also destroyed the country’s already weak infrastructure. Within 24 hours of the quake, Taiwan dispatched five rescue and medical teams to Haiti. Being no strangers to earthquakes, the Taiwanese knew that time would be crucial if lives were to be saved amid the rubble. Since then, Taiwan has joined other countries in helping an estimated two million survivors to rebuild their lives.

Taiwan, a country rarely in the international spotlight, has truly risen to the challenge by mobilizing its resources quickly and effectively, something that has not gone unnoticed by the international community. The Wall Street Journal noted how Taiwan was pulling its international weight in Haiti despite being kept in a diplomatic no-man’s-land. “It should give those working to help Haiti pause to think that a prosperous nation ready and willing to shoulder such burdens is relegated to the wings of the international stage.” Taiwan’s quick action was also mentioned by Time magazine, which wrote, “some of the first search-and-rescue teams to depart for the devastated Haitian capital came from another small island on the other side of the globe: Taiwan.”

Ma pledges ongoing support

Last month, during President Ma Ying-jeou’s visit to the Dominican Republic, he made a point of meeting Haitian Prime Minister Minister Jean-Max Vellerive to personally deliver the relief supplies that had been brought on his chartered plane. Along with 10 tons of disaster relief supplies, Ma also increased Taiwan’s aid donation to US$10 million and gave the prime minister Taiwan-made satellite phones. Speaking to the media afterwards, Ma outlined the four most urgent tasks.

First, Taiwan will provide medical services to help prevent the outbreak of disease that could easily spread given the unsanitary conditions in many devastated areas. Already, teams of medical personnel have rotated into Haiti to offer medical assistance at health stations. On January 19, one such group comprised of 66 medical professionals (23 from the US) from the Taiwan Root Medical Peace Corp (TRMPC) transited through San Francisco on their way to Haiti. They brought 2 tons of medical supplies and equipment for Haiti. Upon that team’s departure, another medical team took its place. So far, three teams have already been sent, and over 5,000 victims treated as of January 28.

On January 27, Taiwan’s first shipment of Taiwanese medical supplies arrived in Port-au-Prince. The 6 tons of supplies were officially delivered to the World Health Organization’s (WHO) representative Henriette Chamouillet.

Second, Taiwan’s government plans to join other countries in building “villages of hope” for hundred of thousands of homeless Haitians. It hopes to build 200 homes capable of accommodating up to 1,000 people, increasing to 1,000 units to house 5,000 people.

Besides TRMPC, other civil organizations, as well as Taiwan International Health Action, have sent a combined 84 tons of relief supplies (worth US$378,000) which arrived in the Dominican Republic on January 18 for transportation to Haiti. The provision included: first aid supplies, foodstuffs, drinking water, clothing, tents and lighting equipment. In April, Taiwan’s Council of Agriculture (COA) will continue the flow of aid with a pledge of 200 tons of rice.

Third, Taiwan would like to establish farms and factories near the newly built housing so that the new tenants can be offered vocational training and jobs to get them back on their feet. The president will encourage Taiwanese businesses to work in Haiti to spur job creation. Already the TRMPC has allocated US$110,000 to Mercy Corps International for exactly this purpose.

Fourth, the government will also work with non-governmental organizations to encourage direct sponsorship of orphaned children through World Vision Taiwan and the Taiwan Fund for Children and Families. Currently, Taiwanese people sponsor 200,000 children overseas, according to the Taiwan News.

Taiwanese officials are also mulling the possibility of canceling or reducing Haiti’s public external debt, which reached US$1.8 billion in 2008. At least US$91 million of that amount is guaranteed by Taiwanese banks.

Tzu Chi’s inspirational work for Haiti

Beside government agencies, Taiwan’s biggest non-profit organization, Tzu Chi, has taken an active role in the relief work. Immediately after the earthquake, the Buddhist Tzu Chi Foundation sent a team to evaluate the situation in Haiti. The foundation decided to focus its work in the district of Tabarre since it was designated by the UN to be a suitable place to accommodate survivors, and also because Tzu Chi had prior experience working with a local orphanage, the Institute for Human and Community Development (IHCD), there. Tzu Chi volunteers had visited and provided assistance to the orphanage just a year before the earthquake. When they returned to the area, they saw some of the plastic tarpaulins they had given out before being used to provide make-shift shelters.

Soon after the earthquake, Tzu Chi began stockpiling instant corn powder, a food staple in Haiti, and began including it, along with cooking oil, milk powder, beans, oatmeal, rice, gas stoves and reusable utensils, in their relief packages. After the initial small distribution on January 29 at IHCD, Tzu Chi has continued with several smaller distributions as well as a large distribution in the city of Tabarre in cooperation with officials from USAID, local churches, the Haitian police and UN peacekeepers from Jordan. This week, the foundation will conduct another large-scale distribution by providing food as well as medical and dental services to over 10,000 survivors.

Early February, Tzu Chi began its work relief program which pays Haitians for cleaning up their community in return for either food or cash. People registered to take part are delighted to be paid to clean up and to help in the reconstruction. It gives them a sense of hope, respect and pride. Participants are fed by Tzu Chi volunteers and they can also take meals back home for their families.

Currently, more food, blankets and portable restrooms are on their way to Haiti from the United States and Taiwan. On February 4, Tzu Chi’s third major shipment, with enough food for 1.6 million meals, left its headquarters in Hualien, Taiwan.

A time for wider recognition

Taiwan has a long standing relationship with Haiti. It is one of the countries that continue to recognize Taiwan as a sovereign country. Even before the earthquake, Haiti was a country in need of assistance, and Taiwan has tried to do its part.The Taipei-based International Cooperation and Development Fund (ICDF) have been working with local farmers to see if a Taiwanese strain of rice called “Taichung-shien No. 10” would grow well there. With the ICDF’s assistance, farmers in Haiti have planted 3,000-hectares on farms in the Artibonite region. When the earthquake struck, the ICDF donated US$50,000 towards purchasing 50 tons of locally grown rice to boost post-quake relief. Buying locally is the best form of assistance since farmers are provided with a market for their products and the money spent remains within Haiti. Besides working with traditional farmers, ICDF is also supporting fish-farming in southern Haiti.

Before the earthquake, Haiti was ranked as one of the poorest countries in the world, at 153 out of 177 nations. Located all the way across the globe, Taiwan went the extra mile to help Haiti. In many other parts of the world, Taiwan has also stepped up to the plate to offer assistance to many other countries in their hour of need. Perhaps now is the time to acknowledge just how much more Taiwan could do if it were a full fledged participating member of the international community.

President Ma transits through San Francisco

Taiwan’s President Ma Ying-jeou arrived in San Francisco on Jan 25 for an overnight layover en route to Honduras and the Dominican Republic. He was greeted at the San Francisco International Airport by Raymond Burghardt, chairman of the American Institute in Taiwan (AIT), and by Jason Yuan, Taiwan’s chief representative in Washington, D.C.

During his stay, he met with San Francisco Mayor Gavin Newsom, Oregon Congressman David Wu, and talked on the telephone with 11 US senators and house representatives on the issues of US beef imports, US arms sales and Taiwan’s aid to Haiti.

According to the World Journal, Ma made the most of the telephone conference calls which were attended by Taiwan’s Secretary General of the National Security Council Su Chi, Agricultural Minister Chen Wu-hsiung, Economics Minister Shih Yen-shiang, Foreign Minister Timothy Yang and Information Minister Su Jun-pin.

The congressional members Ma spoke to included US House Speaker Nancy Pelosi, Kit Bond (vice chairman of the Senate Intelligence Committee), Eni F. H. Faleomavaega, (chairman of Subcommittee on Asia, the Pacific and Global Environment), Robert Menendez (chairman of Senate Taiwan Caucus), Saxby Chambliss (ranking member of the Senate Agricultural Committee), and Congressman Dave Camp, who joined with three other representatives in a letter to the US Trade Representative demanding Washington suspend trade talks until Taiwan lifts its ban on US ground beef and bovine offal.

Ma’s delegation emphasized that the calls were defined as “communications with Congress” only. Over half of the senators and house representatives Ma talked to were from agricultural states or constituencies. They all expressed their concerns about Taiwan’s policy toward US beef imports. Ma explained that Taiwan welcomes American bone-in beef with the exception of ground beef and bovine offal over public health concerns.

The Central News Agency reported after listening to Ma’s explanation, that most of the US congressmen understood Taiwan’s attitude and stance. Ma expressed his hope that they would communicate with their constituents to avoid further misunderstanding about Taiwan’s position.

Ma also met with prominent Asians, such as John S. Chen (chairman of the Committee of 100), David Ho (well-known Taiwanese American AIDS researcher), and Steve Chen, (the co-founder of YouTube and another famous Taiwanese American entrepreneur). He also visited the pharmaceutical company IMPAX Labs, run by a Taiwanese American entrepreneur in Hayward, CA.

The president continued on to Central America where he attended the inauguration ceremony of Honduran President Porfirio Lobo Sosa. He then traveled on to the Dominican Republic for a short visit to express his concern for neighboring Haiti, which was struck by a catastrophic magnitude-7 earthquake on January 12. His chartered flight carried 10 tons of disaster relief supplies that were unloaded in the Dominican Republic and driven into Port-au-Prince, Haiti’s capital.

Local election results prompt Ma administration soul searching

President Ma Ying-jeou, chairman of the ruling Kuomintang (KMT), vowed to continue pushing for reforms and said his party will humbly conduct a thorough review of current administrative policies in the wake of the local elections which reduced the party’s control of county and city governments by two. The total number of counties contested at the elections was 17, among them four were won by the opposition Democratic Progressive Party (DPP) and one by an independent.

Ma declined to characterize the outcome of the latest elections as a defeat for the party, but did say that the election results were “not satisfactory.” With the economy in deep recession and experiencing a high unemployment rate, Ma described voters as “very kind and generous” towards the KMT at the elections.

On December 5th, 65 percent of the roughly seven million eligible voters in Taiwan and its offshore islands went to the polls to elect 17 new county magistrates, 592 county councilors, and 211 township chiefs.

The “three-in-one” elections excluded the administrations in Taipei City and Kaohsiung City, both of which enjoy special municipality status. No elections were held in Taipei County, Kaohsiung County, Taichung City, Taichung County, Tainan City, and Tainan County since they are due to be upgraded or merged into special municipalities. In December 2010, elections in Taipei City, the New Taipei Municipality (originally Taipei County), Greater Taichung, Greater Tainan and Greater Kaohsiung municipalities will be held. These are considered to be the most important elections prior to the 2012 presidential election.

KMT suffers setback, opposition gains ground

The KMT won elections in 12 counties, maintaining a ruling majority in northern and eastern Taiwan, and on the offshore islands. The KMT lost in Ilan County, which is a region heavily influenced by the DPP. The victor in Hualien County was a former KMT member, who violated KMT discipline rules to enter the election. The United Daily News called this election one with “no surprises.”

In 2005 at, the last local elections of county magistrates and city mayors (including those places where no elections were held this time), the KMT won 50.96 percent of the total votes. This time they only won 47.8 percent. The DPP, except for losing to the KMT by 2.7 million votes at the 2008 presidential election, the party gained 45.3 percent of the total ballots, an increase from the 41.95 percent. The margin between the DPP and the KMT has now closed to only 2.5 percent. This time, the DPP gained ground in every county and city except in Hualien County, where the DPP made no candidate nominee.

Most media outlets in Taiwan attributed the DPP’s small victory to the success of its election maneuvering by Chairperson Tsai Ing-wen, and considered her the best DPP candidate for Taipei City mayor in 2010. Tsai has a PhD in Law from the London School of Economics and Political Science. Some media consider her as a strong candidate against Ma when he runs for re-election in 2012. Commenting on the election results, Tsai said the significance of the elections is that “people cast a no confidence vote against the Ma government.”

Given the state of the economy, the Liberty Times attributed the KMT’s defeat to Ma’s failure at the mid-term elections. However, the Taipei-based China Times said the DPP was sure to win more votes based on the KMT’s unimpressive administrative performance and not because of Tsai’s leadership, or the DPP’s efforts to reform.

Let battle commence

Professor Chen Chao-chien at Min Chuang University said the DPP’s small victory is the result of a “pendulum swing effect.” Due to the repeated scandals suffered by the previous DPP government, wavering voters used their votes to penalize the DPP at the 2008 presidential election. This time around, they are doing the same to give a warning to the ruling KMT.

Even after losing two counties at the elections this time, the KMT still controls a majority in the county magistrates. This will not hurt the ruling KMT’s administrative capability and will have only a limited impact on the stock market and relations across the Taiwan Strait.

However, the elections are the first round of skirmishes before the 2012 presidential election battle begins. The second round will be the elections of five special municipality mayors in 2010. The southern municipalities of Kaohsiung and Tainan have traditionally been under DPP leadership. In recent years, Taipei City and the New Taipei Municipality in the north have also been in the hands of the DPP. The KMT will surely face a tough fight in 2010.

Ma elected KMT chairman

President Ma Ying-jeou has become the chairman of the Kuomintang (KMT, the Nationalist Party) for the next four years. After the uncontested July 26th election, Ma reiterated his determination to reform the ruling party and to work more closely with the Legislative Yuan to increase government efficiency.

Ma won with 285,354 votes out of 308,462 votes cast. The KMT has a registered membership of 534,739, which indicated a 58 percent turnout. This is Ma’s second term as KMT chairman, his first time was in 2005 when the KMT was the opposition party. In 2007, after being indicted for misappropriating expenses as Taipei’s mayor, Ma stepped down and was succeeded by Wu Poh-hsiung. Ma was later acquitted of the charges.

Ma’s bid drew criticism from the opposition parties since one of his presidential campaign promises was that he would not seek to double as the KMT chairman. However, he justified his bid for the chairmanship by citing the need for further government streamlining in the face of the global financial slowdown.

With Ma now serving as the president and KMT chairman, the Central News Agency reasoned he now has the clout to take full responsibility for Taiwan’s future – to bring peace to the Taiwan Strait and to transform Taiwan into a fully developed country ready to meet global challenges.

The KMT was founded in 1912 by Dr. Sun Yat-sen shortly after the revolution to overthrow China’s Ching Dynasty. The party can trace its roots to the Revive China Society, which was founded in 1895 in Hawaii. The KMT ruled China from 1912 until Chiang Kai-shek retreated to Taiwan in 1949 after the Chinese Civil War.

Taiwan’s opposition Democratic Progressive Party (DPP) Chairperson Tsai Ing-wen sent her congratulations to Ma on his appointment, but expressed concern over Taiwan’s democracy and the relations across the Taiwan Strait. Hu Jintao, the Chinese Communist Party general secretary, also sent his congratulations to Ma. Trying to allay fears, the Taipei Times reported that Ma said he is in no hurry to meet Hu, saying that the chairman need not attend every meeting between the parties. Even so, the United Daily News commented that as KMT chairman, Ma faces a difficult task in leading his party into December’s elections for magistrates and mayors.