Taiwan Votes 2016: Hong Kong’s vital interests

The first in a series, Taiwan Votes looks at this week’s elections with guest columnist Ross Feingold. First up: Taiwan’s Presidential & Parliamentary Election – What Hong Kong Needs to Watch, and Why.


On Saturday, January 16, 2016 voters in Taiwan will elect a new president as well as 113 members of Taiwan’s parliament, the Legislative Yuan. Business persons, diplomats and government officials in Hong Kong should pay close attention to the election for what lessons can be drawn for Hong Kong’s future political development.

In addition to the strong business and tourism relationship between Hong Kong and Taiwan, the spring 2014 occupation of the Legislative Yuan by university students, known as the Sunflower Student Movember (太陽花學運), who sought to delay implementation of a trade in services agreement with the mainland was an example for Hong Kong’s umbrella movement protesters to follow later that year.

 

Closer and closer

Hong Kong – Taiwan ties have benefited greatly from President Ma Ying-jeou’s (馬英九) rapprochement policies with the mainland. In 2011, a significant milestone was reached when Taiwan’s de-facto consulate in Hong Kong, the Chung Hwa Travel Service (中華旅行社), was renamed as the Taipei Economic and Cultural Office (臺北經濟文化辦事處), the name used by many of Taiwan’s de-facto embassies and consulates throughout the world. Similarly, in 2011 the Hong Kong SAR government opened in Taipei the Hong Kong Economic, Trade and Cultural Office (香港經濟貿易文化辦事處). Financial Secretary John Tsang attended the opening ceremony. A visit to Taiwan by such a high ranking Hong Kong SAR official was not possible under the previous Democratic Progressive Party government that ruled from 2000 to 2008, when mainland – Taiwan relations reached a low point.

Taiwan’s popularity for Hong Kong travelers has dramatically increased, with Taiwan recording 1,375,770 visitor arrivals from Hong Kong in 2014, a 16% year-on-year increase (though Taiwan arrivals in Hong Kong decreased 3% year-on-year to 2,030,000).

Taiwan and Hong Kong continue to be important to each other for bilateral and indirect trade involving the mainland. In 2014, Taiwan was Hong Kong’s fourth largest trading partner, third largest market for domestic exports, fifth largest market for re-exports, and second largest source of imports. Hong Kong was Taiwan’s fourth largest trading partner, second largest export market and 28th largest source of imports in 2014. Average annual growth rate of indirect trade between the mainland and Taiwan through Hong Kong was 8.0% during 2010 – 2014. Indirect trade increased by 8.9% in 2014. In 2014, HK$292.3 billion worth of trade between the mainland and Taiwan was routed through Hong Kong, representing 19.0% of the total trade between the mainland and Taiwan.

 

Vote vote vote

On Saturday, voters will receive three ballots, one for the presidential election, one for their constituency member of the Legislative Yuan, and one political party ballot.

Below are key issues that Hong Kong observers should watch for in Saturday’s election; these are the issues similar to those that arising in Hong Kong’s own recent political debates.

Presidential Mandate

The deeply unpopular incumbent, President Ma of the Kuomintang, or Nationalist Party, is unable to run again due to term limits of two four year terms. The KMT selected the deputy Legislative Yuan speaker Hung Hsiu-chu ( 洪秀柱) as its candidate, only to later replace her with party chairman Eric Chu Li-luan (朱立倫). It hasn’t helped the KMT’s chances. Tsai Ing-wen (蔡英文), the candidate of the Minjindang, or Democratic Progressive Party, has consistently led polls over the past six months. Before the blackout period began on the publication of polls ten days prior to the election, a poll by Taiwan’s Cross-Strait Policy Association showed 45.2% of 1,052 people surveyed supported Tsai, with only 16.3% supporting the KMT’s Chu.

Tsai lost the 2012 presidential election to Ma by 45.63% to 51.60%; James Soong Chu-yu (宋楚瑜) of the People First Party, a perennial candidate whose views are generally aligned with the KMTs’ (and is running again this year) received 2.77%. Her vote deficit was 1,167,149 votes.

Tsai and Chu’s poll numbers are broadly similar to the spring 2012 public opinion polls of CY Leung and Henry Tang, respectively. Although Tsai might win by several million votes, if she does not significantly change her percentage of the vote versus 2012, she will be unable to claim a strong mandate, even if her election is by popular vote.

Legislative Yuan Seats

Seventy three legislators are elected under a first-past-the-post system in single-member constituencies, while thirty four are elected via the political party ballot; parties that receive at least 5% of the party vote receive seats. Six seats are reserved for aboriginal voters. In the outgoing Legislative Yuan, the KMT holds 64 seats and the DPP 40 seats, with the remainder divided among smaller parties.

DPP leaders are optimistic that they will win an outright, majority, or very close to a majority that could be buttressed by friendly smaller parties. Combined with the presidential office, the DPP believes this will lead to a period of better relations between the executive and legislative branches. However, recent experience in Taiwan (and Hong Kong) indicates that even when the executive and legislative branches are controlled by members of the same parties (or the chief executive and legislative majority parties are generally aligned in their views), such does not guarantee that the executive’s legislative priorities will be approved.

In the 2001 Legislative Yuan election, the DPP emerged as the largest party at a time when Chen Shui-bian ( 陳水扁) of the DPP was president (the KMT and PFP’s combined seats gave them a working, though fractious, majority). More recently during President Ma’s two term tenure, the KMT has had a majority in the Legislative Yuan. Neither period was one in which the executive branch exercised strong control over their party’s legislators.

Performance of New Political Parties

Following 2014’s Sunflower Movement, participants and sympathisers began to transition from civil society activists to politicians, with the formation of new political parties to represent the views of the protestors and other constituencies who felt underserved by the KMT and DPP. These parties are known as the “Third Force” and their rise parallels that of localist parties emerging from the Umbrella Movement; think HK Indigenous and Youngspiration.

In Taiwan, the most notable is the New Power Party, led by musician Freddy Lim (林昶佐) of a popular heavy metal rock band Chthonic. Lim has in the past been an advocate for human rights and Taiwanese independence and led Amnesty International’s Taiwan branch in 2012. Mr. Lim would, at least physically, instantly become the Legislative Yuan’s first “Long Hair” physically, if not also ideologically.

Competing with the NPP for votes is the Green Party-Social Democratic Party Alliance, which together support progressive land, environment and workers’ rights policies.

During Taiwan’s democracy era, the issues prioritized by the Third Force parties were more likely to be championed by the DPP’s rather than the KMT. Thus, to the extent Third Force candidates win legislative seats, it will come at the DPP’s expense. Their desire to work with the DPP also remains to be seen, given their belief that the DPP has failed to achieve the “progressive” part of its name. It’s possible that after Saturday the Legislative Yuan will have multiple left-of-centre parties, similar to the numerous pan-democrat parties in LegCo. Unfortunately, Taiwan lacks a right-of-centre, liberal (in the traditional sense) free markets party.

 

Civil Society Organisations / Protest Leaders

Many of the Sunflower movement leaders were unable to transition from protester to politician, whether due to youth, the co-opting of their budding political parties by more experienced politicians or more prominent personalities, or divergence of political priorities. The proliferation of Third Force parties was due to Sunflower movement leaders’ inability to maintain policy unanimity after the protesters returned to their classes. With local elections in November 2014 and all of 2015’s political season, civil society organisations began to lose their appeal as mobilising platforms, as political parties with a chance to enter the legislature came to be seen as platforms with more potential to effect change.

Again, regardless of Saturday’s results, this already serves as another lesson for Hong Kong’s Umbrella movement leaders.

Hong Kong visitors: Not just tourists

Recent media reports state that Hong Kong residents will visit Taiwan this week on organised tours to observe election events and the vote on Saturday. Wang Dan (王丹), a Tiananmen Square protest leader who now lives in Taiwan, is hosting some of these Hong Kong visitors at his New School for Democracy (another Tiananmen leader, Wu’er Kaixi (ئۆركەش دۆلەت or 吾爾開希), is running for the Legislative Yuan).

Certainly, security officials in Beijing will find Hong Kong’s political tourists something to observe, if not a reason for concern.

In Hong Kong, the authorities have a pattern of entry refusals for Sunflower Movement leaders. Last week an NPP Legislative Yuan candidate was denied entry, the latest in a series of entry refusals for Sunflower movement leaders that began shortly after the protesters vacated the legislature.

In light of other recent developments that impact Hong Kong’s reputation for free speech and in the absence of an explanation why entry was refused, this should be cause for concern, especially when contrasted with Taiwan’s welcome to such visitors from Hong Kong.

 

Ross Darrell Feingold is a commentator on business and political issues. Mr. Feingold contributed this article in his personal capacity and the views expressed are his own and do not necessarily represent the views of his employer.

the author

Ross Feingold has extensive experience with international finance, regulatory, and policy issues. Mr. Feingold worked in Hong Kong for The Royal Bank of Scotland supporting its Asia Sale Program, and was the project manager for the bank's opening of a new office in Taiwan. He has worked with Deutsche Bank (Hong Kong), J.P. Morgan (Singapore) and international law firm Russin & Vecchi (Taipei), and Jardine Fleming (Taipei). Mr. Feingold presently serves on the global board and as Asia director of The Association of Americans Resident Overseas, a non-partisan advocacy organization that represents the interests of U.S. citizens living and working abroad. He advises on strategic communications and outreach efforts, and interacts extensively with Asian governments and numerous international organizations. He is admitted to practice law in New York and Washington DC Formerly: Asia Chairman, Republicans Abroad Asia Chairman, Mitt Romney presidential campaign (Primary, 2008) Asia Chairman, John McCain campaign (General Election, 2008) International finance committee, Mitt Romney Presidential Campaign (2012) East Asian Studies and Political Science, cum laude, from Bucknell University J.D.,American University's Washington College of Law (Securities and Corporate Finance Mr. Feingold studied Mandarin at National University of Singapore and National Taiwan Normal University. Mr. Feingold speaks frequently about political and foreign policy issues, appearing on BBC, Bloomberg, CNBC, Channel News Asia, Voice of America and other networks.