On May 20, Chen Shui-bian began his second four-year term as Taiwan’s first president from the former opposition Democratic Progressive Party. Because he had been more assertive on cross-Strait and Taiwan status issues in his campaign than he had been four years earlier, observers at home and abroad scrutinized his inaugural speech for signals of his intentions with regard to independence for Taiwan.

The inauguration came two months after an extremely close election that Chen won by roughly 30,000 votes (out of 13 million) but which his opponents from the former ruling Nationalist Party (Kuomintang) and its offshoot People’s First Party have denounced as illegitimate. Two “defensive” referenda that Chen and his backers had fought hard to put on the ballot — one calling for Taiwan to strengthen its defense capabilities if the PRC continued to threaten Taiwan with missiles, the other supporting the government’s pursuit of a “framework” of “peace and stability” in cross-Strait relations — failed to pass under Taiwan’s recently enacted and restrictive referendum law, despite receiving a majority of the votes cast.

As Chen’s second term began, challenges to the election and the president’s legitimacy continued to unfold. FPRI convened a symposium following the election at which Senior Fellows Shelley Rigger and June Teufel Dreyer, Asia Program Director Jacques deLisle, and other participants assessed implications of the election for Taiwan and for international relations.

Explain Chen’s Victory

With Taiwan’s poor economic performance during Chen’s first term, and with no progress having been made in cross-Strait relations (in part because Beijing was unwilling to deal with Chen), Chen’s pan-Green alliance (the DPP and former President Lee Teng-hui’s Taiwan Solidarity Union) trailed by a double-digit margin a year before the election. It looked as if the 2004 election would go to the pan-Blue (KMT and PFP) alliance’s ticket of the two candidates who together had garnered the majority of the votes cast in the three-way presidential election of 2000 that Chen had won with a 40% share. Still, Chen was able to eke out a victory in 2004, owing to several factors.

When Chen and Vice President Lu were shot in an apparent assassination attempt on the eve of the election, the pan- Greens garnered a decisive sympathy vote. Chen also may have benefited when several thousand (according to the government — the opposition estimated many times that number) military and police, generally assumed to be pro- Blue, were mobilized as part of the post-shooting emergency and lost the opportunity to vote. The symposium looked at the underlying reasons that the race had come so close in the final months that these votes could change the outcome.

Chen’s opponents were weak. Pan-Blue presidential candidate Lien Chan (KMT) is a notoriously poor campaigner with high “negative” ratings in public opinion polls; vice presidential hopeful James Soong (PFP) is more skilled and enjoyed higher overall public approval, but his negative ratings with significant segments of the electorate limited his usefulness. Voters’ tendency to pay more attention to the top of the ticket further weakened his ability to make any impact.

Burdened with weak candidates, the pan-Blues could not induce enough of their vase to turn out and cast loyal votes for this KMT/PFP bloc. Taiwanese voters have relatively weak party affiliations, and mechanisms the KMT relies on to mobilize voters in Legislative Yuan and local elections do not work as well in presidential contests. Pork-barrel politics is difficult to engineer and would be seen as inappropriate in a presidential campaign.

Chen Shui-bian’s four years as president had also deprived his opponents of an argument they had wielded relatively effectively during the 2000 election: that Chen was too reckless, incapable, and inexperienced to deal with the difficult cross-Strait relationship and thus might provoke China to action.

Moreover, former president Lee Teng-hui, who had taken major steps to extend Taiwan’s claims to statehood or state-like status during his final term, had shifted his allegiance. In 2000, he had supported (disingenuously, as many saw it) his vice president and KMT nominee Lien Chan; in 2004, he and his new party backed Chen.

Chen also masterfully controlled the terms of the debate and set the agenda. His opponents had to fight the election on his issues, summarized by the slogan, “Taiwan, Yes!” Unable to make Taiwan’s troubled economy or government performance the issue, Lien and Soong spent much of the campaign defending themselves against claims that they were insufficiently committed to Taiwan and too willing to get too close to China.

Finally, as often happens in Taiwan elections, the two most important outside powers — the U.S. and China — either helped the incumbent or failed to help his opponents. Taiwanese perceptions of U.S. signals aided the pan-Green cause. Taiwanese saw Chen as having enjoyed a warm welcome on his October visit to the U.S. and deduced that Washington had cast its vote for him. Such readings of the Chen visit surely exceeded Washington’s intentions, and Taiwanese apparently underestimated the seriousness of President Bush’s rebuke to Chen in a joint appearance with visiting PRC Premier Wen Jiabao two months later. Bush’s caution that Chen appeared to be taking unilateral steps to change the status quo and reminder that the U.S. opposed any such steps were discounted in Taiwan as a verbal sop to China.

Beijing’s attempts to deter voters from supporting the candidate it did not like were less overt and threatening than the missile tests and military maneuvers the PRC launched in its unsuccessful attempt to drive voters from Lee Teng-hui in 1996, or Zhu Rongji’s finger-wagging warning of possible “dire consequences” if Taiwan’s electorate opted for Chen in 2000. The 2004 efforts consisted of more subtle pressures on mainland-investing Taiwanese businesses to support the KMT/PFP bloc, and diplomatic efforts to get foreign governments (including Japan and the U.S.) to condemn Chen for upsetting the status quo. Such efforts may not have backfired as more heavy-handed tactics had in the past. But China’s moves again appear to have done little to advance China’s immediate ends, and clearly did not deny Chen his come-from-behind victory.

Implications for Politics in Taiwan

The extraordinarily close election and its bitter aftermath raised the question of whether Taiwan faces a political crisis. Taiwan did not plunge into chaos following the election: violent demonstrations were few and brief, and most Taiwanese appeared to quickly get back to their ordinary lives. The election loss was a crisis for the pan- Blue alliance, and especially the KMT. Several outcomes seemed possible immediately after the election, including:

• KMT’s fragmentation and demise, after losing two presidential elections in a row after a half-century of uninterrupted power;
• a shift away from its “mainlander” wing toward its “indigenization” wing, which had accelerated under Lee Teng- hui and could receive new impetus after a campaign in which Soong’s mainlander background and Lien’s mainland birth and mainlander wife were among the pan-Blue ticket’s liabilities;
• the re-merging of the KMT and PFP, which the two parties agreed to undertake after their defeat.

Whatever the fate of any individual political party, Taiwan’s electorate remains roughly equally pro-Green and pro-Blue, providing a seemingly durable basis for a two-bloc system.

The controversy over the election’s legitimacy generated a potential political and constitutional crisis that could damage Taiwan’s democracy, with the political-legal challenges pan-Blue critics have raised to Chen’s election. The KMT/PFP has rejected Chen’s victory, claiming among other things:

1. errors in the counting of votes, with hand counting of hand-stamped ballots and a large number (approximately 300,000 in the original count) of blank or spoiled ballots having produced the narrow victory;
2. the presidential election was improperly conjoined with the pair of referenda that were themselves unauthorized by law;
3. fraud at the ballot box, based largely on a handful of reported incidents of improper influence on voters and on the unusually high number of blank or spoiled ballots (reflecting, many suspected, not fraud but rather “protest votes”);
4. moves by Chen that had the effect of disenfranchising some pro-Blue voters, such as the military and police personnel mobilized in response to the assassination attempt, the large number of military personnel on routine election-day duty, and the hundreds of thousands of Taiwanese living on the mainland whose return to the island to vote was impeded by Chen’s failure to pursue and achieve direct cross-Strait transportation links;
5. Chen’s having staged the assassination attempt in order to generate the sympathy vote that provided his margin of victory; and
6. Chen’s having “unfairly” benefited from the sympathy vote even if he and his party had nothing to do with the shooting.

This last argument may seem less “system-threatening” than several of the others, but it is arguably the most corrosive: it implicitly rejects the outcome of a procedurally fully proper election in which the victor had done nothing unlawful.

The pursuit and implementation of various possibly available remedies could have and could still improve or worsen prospects for Taiwan’s political stability and democratic development. A full recount of the votes would leave standing the “actual” results of the initial balloting, which, based on the partial recount results that were reprorted, would likely uphold Chen’s victory. This option initially faced serious difficulties and much potential for conflict, including the lack of adequate grounds under the law to trigger a recount of most or all of Taiwan’s many electoral districts; the two camps’ inability to come to consensus on the terms of new, retroactive legislation that would authorize a recount in extremely close elections; and the high likelihood that any recount would not end the dispute. Controversy has continued even after the completion in mid-May of the judicially-overseen recount that the two sides ultimately agreed upon. Even though the outcome (which has not yet been released) is sure to favor Chen, leading voices from the pan-Blue camp continue to reject Chen’s victory.

Taiwanese law permits revotes under some circumstances. In addition to its obvious potential to cause tumult, a revote would prolong uncertainty and the attendant risk of political crisis. The KMT filed suit to force a revote, but it could take up to six months for an initial decision and an indefinite subsequent period of time for appeals and remands. Letting this process play out would severely hamper Chen’s legitimacy and authority and, thus, the ability of the government to govern.

The pan-Blue side could resort to recall, which would in turn require a plebiscite on ousting or retaining Chen, or impeachment. But this would require clearing time-consuming and possibly insurmountable hurdles, such as (depending on the procedures chosen) securing the required high level of support in the sharply divided Legislature or the mothballed National Assembly.

As supplements and substitutes for such legal means, the KMT-PFP bloc’s options include more purely political measures as well. These range from ordinary partisan attacks on Chen and the DPP (particularly with year-end legislative elections looming) to more extraordinary tactics. Lien’s initial rejection of the election’s results gave a taste of the latter tactic. So too did the ongoing insinuations from pan-Blue leaders that Chen may have staged the assassination attempt, and the tempestuous post- inauguration meeting of the legislature in which pan-Blue representatives denounced Chen as the head of a “bogus regime.”

Despite these reasons for worry, prospects for avoiding severe setbacks to Taiwan’s democratic institutions look reasonably good. Positive signs included: the general calm among the populace; the conciliatory tone of Chen’s inaugural speech; the demonstrated capacity of Taiwanese democracy to survive partisan histrionics and even fisticuffs in the legislature; the major parties’ agreement to undertake the recount under court supervision; and their willingness to let the recount process and the litigation play out.

If the litigious or ordinary political means produce an outcome that the losers accept, then Taiwan’s political order could emerge strengthened from the crisis. Taiwan’s legal institutions and democracy-based legitimacy will not only have survived a major challenge; they will also have played a crucial role in steering the country through the perilous passage.

Some possible developments would produce a less benign outcome. A ratified Chen victory could lead the pan-Blue camp to adopt the rejectionist, legitimacy-challenging stance adumbrated in some early reactions. Or, despite Chen’s post-election pledges of conciliation, a confirmed Chen victory could lead the president to seek to derive a mandate for more aggressive versions of constitutional reform or other potentially divisive measures from his slim victory, from popular support for the referenda which did draw a majority of votes cast, and from any gains made in the upcoming legislative elections.

Finally, even if, as seems likely, the election’s aftermath does not lead to systemic crisis, the politics and policy agendas it produced still have seeds of potentially serious difficulties. These include: constitutional reform, which Chen has pledged to pursue on his original timetable of adoption in 2006 and implementation in 2008; identity politics, which have become more “green” and less “blue”; and referenda, which Chen and his supporters have contemplated on such topics as constitutional reform, shrinking the legislature, and investigating KMT finances. Such matters are not merely sources of domestic political conflict; they also are red flags for Beijing and thus portend continued tensions across the Strait.

The Election, Foreign Relations, and Taiwan’s International Status

Cross-Strait Policy and Taiwan Identity

Cross-Strait policy has persisted as the dominant factor in Taiwan’s external relations and a key factor in Taiwanese politics more generally. But the 2004 campaign and Chen’s reelection brought a significant shift — from blue toward green — in Taiwanese debate. While Chen’s inaugural speech sought to convey a moderate tone, his campaign’s “Taiwan, Yes!; (China, No!)” theme was unmistakable and in some respects unprecedented.

More significantly, the pan-Blue camp has moved substantially toward pan-Green positions. The opposition parties dared not speak as approvingly as they once had about reunification. Where four years earlier Chen had to calm fears that he might be too radically pro-independence, the pan-Blue parties in 2004 had to settle for diluting, rather than stopping, Chen’s calls for referenda on cross- Strait security issues. Lien and Soong were forced to defend proposed initiatives for better relations with the mainland against charges that they were insufficiently protecting Taiwan’s interests. Chen mocked the KMT as the “Chinese Nationalist Party,” and the pan-Blue candidates were reduced to kissing the ground as a public demonstration of their fealty to Taiwan. Cross-Strait policies on both sides of the Strait seemed likely to have to cope with a Taiwanese identity increasingly including all Taiwan residents and excluding PRC nationals, the emergence of which was spurred on by Chen’s campaign and inaugural address, Lien’s and Soong’s defensive responses, and Lee’s pre-election “hands across Taiwan” event, held on the anniversary of the February 28, 1947, KMT massacre of Taiwanese civilians.

The U.S. The election and its aftermath underscored the continuing centrality in Taiwan’s external affairs of U.S.- Taiwan relations and the U.S.’s policy on cross-Strait issues. It revealed problems in the U.S.’s ability to send clear and effective signals to Taiwan and, perhaps, China as well. As noted earlier, key Taiwanese constituencies overestimated the “message” behind Chen’s October visit to the U.S. and underestimated the verbal slap Bush delivered to Chen during the PRC premier’s December visit. The flurry of envoys Washington sent to Taipei to convey to Chen the administration’s views on the referenda and other issues reflected its own lack of certainty that its position was understood, and yet its public statements seemed mixed and shifting as to just how strongly it opposed the referenda and whether and how soon it would “congratulate” Chen on his victory.

Taiwan and the U.S. could both benefit if U.S. officials paid more attention to developing precise positions on Taiwan and cross-Strait issues and then articulating these clearly and consistently. The Bush administration’s expression of satisfaction with Chen’s May 20 inaugural speech, and top DPP personnel’s subsequent comments that they heard Washington’s views loud and clear, suggest at least modest progress on this front. Washington’s positive comments on the inaugural address and its announcement of a sale of missile-detecting radar technology to Taiwan after the election reaffirmed the close ties between Washington and Taipei. Yet, minor swings of the pendulum in the opposite direction are hardly out of the question in the near future as Chen turns to an agenda that the PRC derides as separatist, destabilizing, and provocative. Such modest shifts in policy will continue to risk creating misconceptions that more significant changes are afoot.

The basic U.S.-Taiwan relationship remains solid and strong 25 years after the signing of its framework document, the U.S.’s Taiwan Relations Act, adopted in April 1979. Indeed, it is ironic that there have been so many highly visible sources of conflict in Taiwan’s relationship with an administration in Washington that has been, in terms of its broad policy inclinations and sympathies, the most “pro- Taiwan” in recent history.

China

The election showed that Taiwan’s external relations would continue to operate under the shadow of Beijing’s determination — but apparent lack of effective peaceful means — to prevent what it sees as Taiwan’s dangerous drift toward independence. Developments on this front during the election campaign indicated potentially significant shifts in China’s tactics for addressing this long-standing issue. While Beijing clearly found Chen no more appealing in 2004 than it had found Lee in 1996 or Chen in 2000, its eschewal of missile tests and its abandonment of the stern warnings Premier Zhu had made about the dire consequences of the wrong election results suggested that Beijing had learned something about the futility of such threatening methods. Over the long run, the more subtle forms of pressure it deployed in the March 2004 elections — pointedly politically motivated audits and inspections of Taiwan-invested PRC firms and their partners, and inducing other countries’ leaders to make statements along the lines of the one that Bush made to Wen Jiabao — may be more effective.

Some of Beijing’s post-election moves, however, seemed like a return to less subtle tactics. It pointedly and publicly rolled up the economic welcome mat for a prominent pro-Taiwan businessman, and scheduled war games near the Strait. China’s post-election thundering about how it could not remain passively on the sidelines if Taiwan descended into chaos sounded all too familiar, and is likely to backfire, as its attempts to affect Taiwan’s presidential politics in 1996 and 2000 did: any disorder that gave the PRC a pretext for threatened intervention would be seen by many Taiwanese as the fault of the parties that Beijing supported — the pan-Blues who took to the streets to protest the pan-Green victory.

The pan-Greens’ victory probably means that the PRC will have to drop its policy of not dealing with Chen unless he accepts the one-China principle. Waiting him out for eight years will be a good deal more difficult than waiting him out for four years. And trying to ignore Chen for four more years surely looks more risky, because his first four years were marked by what the PRC saw as an unacceptable inching toward independence, because the PRC’s cold-shoulder policy apparently had not deterred enough voters from supporting Chen, and because the PRC discerns that Chen might move more boldly toward Taiwanese independence during his final term.

Hong Kong

Hong Kong remained a salient factor in Taiwan’s approach to cross-Strait relations. Since before Hong Kong’s 1997 reversion to Chinese rule, Taiwanese leaders and spokesmen have insisted that “Taiwan is not Hong Kong.” They have eagerly pointed to signs of the Special Administrative Region’s autonomy eroding, the stifling of development of its democracy, and, sometimes, setbacks to the Hong Kong economy to support their case for rejecting anything resembling “one country, two systems” for Taiwan. Recent protests in Hong Kong over the Article 23 legislation (addressing sedition, state secrets and related matters) and controversy over the PRC National People’s Congress’s rejection of calls for universal suffrage for the SAR’s 2007 elections made Hong Kong useful as a negative example for the pan-Green agenda.

It is difficult to assess what events in Hong Kong reveal about the PRC’s Taiwan policy. Recent events in the SAR may simply have reflected unfortunate timing from Beijing’s perspective. Their coincidence with the Taiwan election cycle forced the PRC to balance its Hong Kong goals against its Taiwan goals. Or the PRC may have taken an especially tough line toward pressure from Hong Kong for autonomy partly in order to make the depth of its commitment to national political integrity clear to Taiwanese.

International Status

The question of Taiwan’s international status as a state or state-like entity endures as a core concern. In the 2004 campaign, the status question pervaded two issues that Chen promised would carry into his second term. While Chen insists the two issues— the referenda on the March ballot and constitutional revision—are not related to the status issue, his denials are hard to sustain, for several reasons.

Any use of the term “referendum” in Taiwan’s politics inevitably resonates with the “independence referendum” that was once a plank in the DPP platform but that Chen has promised to eschew under present conditions. Some possible referenda that Chen and his supporters had hoped to bring (but could not under the new referendum law) addressed issues that had long been seen as germane to Taiwan’s international status. Most notable among these was the post-SARS quest for representation in the World Health Organization. Because the WHO is a UN affiliate, it is, on the PRC’s view, a states-only entity. As authority for the two questions put to voters in March, Chen relied on the provision in the new referendum law permitting referenda when national security is under threat. National security is an interest or right of states. The texts of both referenda at least implicitly asserted an equal status for Taiwan and the PRC: the first equated the PRC’s missile threat and Taiwan’s defense posture; the second proposed a framework for cross-Strait dealings that evoked long- standing Taiwanese assertions of equality between the entities on either side.

Constitutional reform, or (as Chen put it in his second inaugural) reengineering similarly implicated questions of Taiwan’s international status. Even though changes to the nation’s name, declarations of independence, and adopting a truly “new” (as opposed to revised) constitution are apparently off the table, Chen’s agenda includes changes that would indigenize the ROC constitution on Taiwan and has included a truly “new” constitution, which is something that newly independent states adopt (although ongoing states sometimes do too). Chen’s second inaugural declared that constitutional reengineering would help make Taiwan a “normal” and “complete” country-terms that resonate with the idea of resolving Taiwan’s ambiguously not-quite-state status.

In addition, the Chen administration has insisted that referenda and constitutional reform are human rights of the people of Taiwan and means for deepening Taiwan’s democracy. Such assertions continue a now-venerable strategy Taiwan’s leaders have used to enhance Taiwan’s international status: invoking global norms of human rights and democratic governance to augment the state or state-like international stature of an entity that honors and implements them. .

PRC-Taiwan Tensions. Military conflict between the PRC and Taiwan is unlikely but not impossible in the foreseeable future. For now, the cross-Strait military balance and the U.S.’s substantial military superiority are sufficient to deter aggressive measures by China to change the status quo. Leaders and constituencies on both sides of the Strait appear still to find the status quo tolerable and not warranting dangerous, sudden moves to alter it. China appears willing to continue to rely upon its long-term strategy, which is to trust that the means to secure peaceful reunification on acceptable terms will eventually follow from Taiwan’s deepening economic dependence on the PRC, China’s increasing military capability, Beijing’s ongoing success in isolating Taiwan diplomatically and, perhaps, Taiwan residents’ lessening aversion to ties with a reforming and developing mainland. On the Taiwan side, there appears to be a widely held sense that the PRC authorities are likely to tolerate many of the moves by Taiwan’s leaders that China officially denounces as unacceptable, thus giving Taiwan considerable space and security.

Still, dangers loom. Many on Taiwan, especially the pan- Greens, appear confident that China will do nothing if Taiwan makes still more moves toward formal independence or takes other steps that to Beijing would endanger the status quo. This optimism may be misplaced and therefore dangerous, but pessimism could bring perils as well. If Taiwanese believe that pushing further toward formal independence were the only possible means of securing continued autonomy in the face of the PRC’s rising power and leverage, then they might well pursue such a strategy even though it could substantially increase the risk of conflict and might not be likely to succeed.

Finally, significant domestic political difficulties on either side of the Strait might beget crises in cross-Strait relations. That this dangerous and common pattern in international relations might recur in PRC-Taiwan relations seems plausible in light of the sharp and protracted discord in Taiwan over the election, and the anxiety over how Chen will construe his victory and implement his platform. In addition, simmering problems on the mainland, such as economic inequality, regime corruption, and peasant/worker discontent, could alter China’s positions and behavior on the Taiwan question in a destabilizing and dangerous direction.