Taiwan

“Governing will be difficult“

On Monday May 20, the new President of Taiwan, William Lai Ching-te and his Vice-President Hsiao Bi-khim were inaugurated in Taipei. Many representatives from neighbouring countries and the international community, politicians from all Taiwanese political groups and civil society representatives attended.

Dr. Rainer Adam, the current head of the Taiwan office of the Friedrich Naumann Foundation for Freedom in Taipei, was also a guest at the inauguration. Freiheit.org spoke to Dr. Adam about the new President Lai, his new government and the political situation on the island.

Who is Taiwan’s new president?

William Lai was born into a working class coal-mining family in northern Taiwan in 1959. The early death of his father from carbon monoxide poisoning in 1960 forced his mother to raise six children on her own. Lai studied public health and served as the president of the National Physicians Support Association. In 1996, he entered parliament and served four consecutive terms as legislator. From 2010 to 2017, he was also mayor of Tainan City, the oldest city on the island. Lai held various positions in the Democratic Progressive Party (DPP). In 2017, he was appointed as prime minister and held this office until 2019. From 2020 until 2024, he supported president Tsai Ing-wen as vice-president. In January, he won the presidential election with 40% of the vote against two other candidates. William Lai is the third vice-president of Taiwan to become president of the island. President Lai is a devoted liberal democrat who will work to defend the island’s democratic order.

What can we expect from President Lai and his incoming government?

William Lai´s Inauguration Speech suggests that he will continue on the path of his predecessor and defend Taiwan as a beacon of democracy. Maintaining the status quo will be at the core of his agenda. This also is what the majority of Taiwan’s citizens want. President Lai called on the People´s Republic of China to cease political and military intimidation against Taiwan. He said that he hopes dialogue will be chosen over confrontation. Lai suggested cooperation, starting with the resumption of tourism and enrollment of students.

Despite the decisive victory in the presidential election, the governing DPP lost its majority in the legislative chamber, which the party held since 2016. Of the 113 seats, 52 are now held by the Kuomintang and 51 by the DPP. Eight seats are held by the Taiwan People’s Party, two by independent MPs. This makes predictions difficult as regards the political compromises necessary for the formulation of new legislation and the endorsement of new policies. Governing will be difficult. The recent physical confrontations in parliement underline the challenges. It will also be a challenge to explain policies to the public and to counter accusations of serving special interests over the public good.

The composition of the cabinet suggests a high degree of continuity. The new members of the security team have extensive experience as all of them served in President Tsai’s administration. For example, the new defence minister Wellington Koo, while again a civilian, has extensive security experience as the former secretary-general of the National Security Council under President Tsai. Mr. Koo swapped portfolios with the former foreign minister Joseph Wu. The new foreign minister, Lin Chia-lung, was mayor of Taichung City and minister of transportation. He led the presidential office as secretary-general since 2023. While Chia-lung Lin has little practical experience in foreign policy, Vice-President Ms. Bi-khim Hsiao, as the former envoy of Taiwan to the USA, has extensive experience in this field. This should ensure an open line to the US government, the most important international partner of Taiwan. Moreover, Ms. Hsiao represented the DPP internationally within the Council of Asian Liberals and Democrats (CALD), a party network. She is well connected in Asia and Europe as well.

The proportion of women in the new cabinet may be considered low by international standards. However, at about 24% it is on a historical high as far as Taiwan is concerned. Especially the nomination of Vice-Premier Ms. Cheng Li-Chiun has won public acclaim, as confirmed by a recent opinion poll.

President Lai has promised to reduce the island’s economic dependence on China. For its American partners the high exports of semi-conductors and micro-chips to Hong Kong are a concern, since they can be passed on to Russia to support Putin’s war effort in Ukraine. President Lai still stands behind the decision of his party to shut down all nuclear power plants by 2025.

How will Taiwan’s neighbours and especially the Communist Party of China react to Taiwan’s new government?

In the past, William Lai has often angered the Communist Party through his pointed remarks. But ever since he entered national politics, he has stressed that maintaining the status quo is his main objective. Nonetheless, we can expect Beijing to issue a stern warning to President Lai to maintain a pragmatic course.

The Communist government might welcome the appointment of Mr. Chiu Chui-cheng as the new head of the Mainland Affairs Council (MAC). Known as a pragmatist, he has extensive experience of cross-straits relations.

What are the main challenges for President Lai and his administration?

Apart from holding the delicate balance of power in the Taiwan Strait and maintaining the status quo vis-à-vis an at times belligerent China, there are serious domestic challenges. First and foremost, there are the rising costs of housing, and the stagnation of per capita incomes and wages. From a European perspective, the expected growth rate of 3.4 percent GDP for 2024 might seem not bad. However, it is not good enough in an ageing society, particularly in view of the rising costs of healthcare and pension provision. To make the public health system more resilient will be one of the tasks for the new government.

Another challenge will be the level and the composition of defence spending. Since this budget item was increased in 2023, 2.6% of GDP has been spent on defence. Experts still consider this too modest in view of the increasing threat from mainland China. Taiwan urgently needs to increase its artillery, missile, cyber and air defence capabilities. The protection of its critical infrastructure also needs to be improved. Finding the right balance for the allocation of public funds to these diverse necessities and the required investments will be a key challenge for President Lai and his team.

What can Germany and Europe do to support Taiwan?

In these times of geopolitical confrontation, closer co-operation between democracies is a no- brainer. Taiwan needs new free-trade arrangements with as many partners as possible in order to strengthen its economy. The EU could move here given the political will of its leaders. However, since speed is not a strength of the EU and given the upcoming EU elections, these are not ideal times for quick results in this matter.  Given this situation, bilateral trade agreements with individual member states might be desirable as intermediary solutions.

European member states, especially Germany, need to rethink their diplomatic practices regarding the visits of officials from President Lai’s new administration. Instead of restrictions, contacts need to be intensified. Bilateral and multilateral meetings, including exchanges with as many actors as possible, promote understanding and trust between like-minded partners as members of the community of democracies. The German government recently missed an opportunity for talks to promote trust and understanding with the new government. In May, during a trip to Europe by Vice-President-elect Bi-khim Hsiao, which took place before she took office, Ms. Hsiao was not welcome in Germany. That was unfortunate.

The US government has sent a large delegation of former officials and politicians to the inauguration of President William Lai and Vice-President Bi-khim Hsiao here in Taipei. This signals that the US government supports President Lai and the new Taiwanese government. While members of the Berlin-Taipei Parliamentary Friendship Association were present at the swearing-in ceremony, I personally would have liked a stronger signal from the German government.

*Dr. Rainer Adam is interim Head of the Taiwan Office of the Friedrich Naumann Foundation for Freedom in Taipei.