The DPP is lamenting its failure to reach the goal of a majority in the Legislative Yuan. The KMT is breathing a sigh of relief that it remains in play as a major domestic political party by continuing its majority. China, on the other hand, has been busy putting together a strategy that focuses very importantly on its relations with the US. As a result, we may be entering a new atmosphere in cross-Strait relations. There will be the same three players, (the US, China, and Taiwan), but the game will be considerably different.
Analysts have had a variety of reasons for the unexpected results of the legislative elections on Dec. 11. Like the strategy of the KMT in the presidential election in March, the DPP strategy in the LY election missed the mark. Whether it was the national identity issue, or allocation of candidates policy, the nature of an LY election compared to a presidential election, or the influence of the international media, the main point was that it didn't produce the intended result.
The KMT, on the other hand, seems to have regained its acumen on how to manage grassroots elections, and seems to have had the resources to pursue it. In the process, however, its ideology within the party may have shifted toward the present mainstream of Taiwan's political spectrum. What we may be seeing is both of the two major political parties struggling for the middle ground (i.e. the mainstream that has developed in the last few years). How this plays out, however, depends on whether both parties can restrain themselves from trying to defeat their major opponent, not destroying it.
In China, all of this activity on Taiwan for the most part is of less importance than the new strategy Beijing is developing to cope with the "Taiwan issue." The announcement that government is developing a law which would make any secession by any entity it claims as part of China, against the "law." That is supposed to put it on a higher level of authority than regulations presumably. It depends on who is reading it, of course, as the making of a law in China is a bit different than, say, Taiwan.
As no details on just what is in the proposed law have been released yet, an accurate analysis of it is not possible. The possibilities are infinite however. It will most certainly challenge the American policy of no unilateral change to the status quo. It could "legalize" an attack by the PLA, for example, or it can be used as a pre-condition for dialogue. It could even establish what it considers as "legitimate" provocation. Yet another possible use of this "law" is that it could "neutralize" the TRA. America has often based its actions on cross-Strait matters as being required by law.
There was one public statement in Beijing's announcement regarding the new law that made clear "one country, two systems" would in any event be used as a part of a future agreement on this subject. If that was meant to offer solace to Taiwanese voters, it indicates just how much the leaders proposing this law are misjudging what Taiwan is about today. The wording of the system has changed but the gap in real terms remains. China wants a "one country, two systems" for Taiwan.
Their objectives remain generally that: (1) there is only one China, and Taiwan is a province of China, not an independent sovereign state; (2) unification of Taiwan and China is inevitable; (3) Taiwanese authorities must recognize the Beijing leadership as the central government of China; (4) negotiations can be conducted on an equal basis by political parties or non-government entities, but not between the two governments; (5) Beijing prefers a peaceful resolution but reserves the right to use force; (6) Beijing is the only legitimate power, and decides on issues of sovereignty, national security, and foreign affairs.