The island state of Taiwan is choosing between the identity politics of the current leadership or the pro-business politics of the opposition Kuomintang (KMT). There are about three months before national elections on Taiwan, and the presidential campaign is extremely intensive.
According to the opinion polls, KMT candidate Ma Ying-jeou takes the substantial lead over Frank Hsieh, the DPP presidential candidate. Ma presents himself as an alternative to the DPP rule, during which country’s relations with Beijing have become much worse, and thousands of Taiwan firms, including those working in the key high-technology sector, have moved to China and the island has become diplomatically isolated. Hsieh, in his turn, is presenting himself as more pragmatic and cautious version of the current president Chen and someone better able to deal with Beijing and defend the independent status of Taiwan.
Both candidates will try to soften Chen’s hard economic line toward China. Ma says he will relax a cap that limits investment by Taiwan firms in the mainland to 40% of net assets. Hsieh promised that he also would relax the investment ceiling for the firms.
Meanwhile, according to Chinese statistics, Taiwan companies that are unable to raise money in Taiwan and remain below the 40% ceiling, turn to other markets. Taiwan firms have invested US$45 billion in 74,000 enteprises in China; unofficial sources name the figure at US$100 billion. These money, passed via Hong Kong, the British Virgin Islands and the Cayman Islands, make Taiwan mainland’s largest foreign investor.
Now the opposition’s candidate is playing the economic card. By words of one of KMT’s candidates, “We have to find our niche. We are an island economy and must work with the outside world or become isolated. In the election, people stress local themes and talk of things at home. This is against the laws of economics.â€