28 March 2008: The presidential election in Taiwan Saturday, March 22 focused on economic issues and solidified the return to power of the Nationalist Party following its taking control of parliament in January.

The decisive win by Ma Ying-jeou over the Democratic Progressive Party’s Frank Hsieh completes the democratic transition of power to the opposition Kuomintang from the DPP which has been in control for the last eight years under outgoing President Chen Shui-bian, and is a sign that the island’s young democracy is maturing. Ma won with just over 58 percent of the vote taking 7.65 million of the 13 million votes cast and will be inaugurated on May 20.

Mr. Ma ran on promises of promoting closer ties with the mainland, even though the Chinese Communists consider Taiwan a breakaway province. The presidential election is expected to spur financial and economic changes in addition to improving relations with China.

Although voters gave Mr. Ma a mandate for more economic integration with China much also depends on China’s behavior. The vote proved that most Taiwanese rejected Mr. Chen’s sometimes bellicose policy on China; however, they also do not want complete unification with the mainland. They also voted against referendums on applying for UN membership.

Investors expect trade ties to improve, particularly in capital and labor flows as the stock market jumped four percent and the currency reached a ten-year high on the Monday following the elections. The TAIEX index gained 340 points to close at 8,865 and the Taiwan dollar reached 30.229 against the U.S. dollar.

President Chen had ignored the economy and voters ended eight years of political stalemate rejecting his pro-independence policy. Despite continued growth the economy has experienced high inflation and unemployment. The biggest improvement with a Ma Administration is expected to be in tourism and capital exchanges but no other major changes are expected. In the wake of his lose Frank Hsieh resigned from his position as chairman of the DPP.

While the economy dominated the election ethnic divisions have resurfaced. Mr. Ma was born in Hong Kong and many indigenous Taiwanese fear he may try to fulfill the KMT platform of ultimately reunifying with mainland China. Traditionally, the DPP has attracted voters whose ancestors were on Taiwan before the Kuomintang relocated to the island in 1949 following defeat by the Communists; the KMT has broadly been supported by the Chinese who came to Taiwan in 1949.

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