Taiwan Elections: Ruling DPP Party Wins Third Presidential Term, Stability For Now But Challenges Lie Ahead

Taiwan’s eighth presidential election held on January 13, 2023, was a close race between three candidates. Lai Ching-te, of the incumbent and traditionally pro-independence Democratic Progressive Party (DPP), won the elections with the help of a split in the opposition vote, garnering 40.1% of the total votes. The new government will play a key role in shaping the cross-strait relationship for the next few years. Although all three candidates advocated the continuation of the current status quo, including avoiding declarations of formal independence as well as rejecting China's proposed "one country, two systems" framework among other things, the DPP has historically had less dialogue with mainland China than the KMT.

Key Highlights

-- DPP wins elections for an unprecedented third term. The key concern is whether a 3rd DPP term results in a rise in cross-strait tensions.

-- Lai has said that he would continue with Tsai's cautious cross-strait policies. There remains uncertainty on Beijing's response.

-- The complex relationship between Taiwan, China and U.S. remains important to the overall global growth outlook and may have implications far beyond their own borders.

“Taiwan's status remains an important potential flashpoint in the bilateral relationship between Washington and Beijing,” says Rohini Malkani, Senior Vice President, Global Sovereign Ratings. “The key concern is, given the DPP's traditional pro-independence leanings, that either government could take actions that appear to threaten the status quo and result in an escalation of cross-strait tensions”