With Vice President William Lai (賴清德) winning the presidential election, but his Democratic Progressive Party (DPP) failing to secure a majority in the legislature on Saturday, his administration is poised to face challenges over the next four years. The obstacles ahead involve not only Taiwan’s thorny relations with China, but also the new domestic political scene and an uncertain global economy.
In President Tsai Ing-wen’s (蔡英文) eight years in office, Taiwan strengthened its partnership with Asia-Pacific countries and formed a consensus with several like-minded nations on regional security. Lai is expected to continue Tsai’s foreign and defense policies such as bolstering ties with the US, Japan and other countries in the Indo-Pacific region, and building new weapons such as submarines and fighter jets.
In the run-up to Saturday’s elections, China used the Economic Cooperation Framework Agreement (ECFA) as a political bargaining chip against Taiwan, and the suspension of beneficial tariffs on several Taiwanese goods is sure to impact domestic industries. Unlike the other two candidates who talked about restarting ECFA negotiations with China, Lai focused on assisting local industries through digital transformation and advocates innovation-driven models to improve firms’ operations. Still, his adminstration should help Taiwanese firms to expand their global presence.
However, Lai faces the daunting task of facilitating meaningful dialogue across the Taiwan Strait without succumbing to Chinese pressure or decreasing Taipei’s goodwill toward Beijing. As Taiwan’s export-oriented economy relies on participation in regional trade blocs, Lai’s administration is expected to step up participation in trade deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Indo-Pacific Economic Framework, to avoid becoming marginalized in the global economy and to respond to China’s growing economic coercion.
The approach Tsai adopted has seen Taiwan gradually reduce its trade reliance on China and increasingly embrace other markets, resulting in significant economic growth and domestic investment over the past eight years. For instance, GDP expanded to NT$23.54 trillion (US$756.21 billion) last year from NT$17.06 trillion in 2015, and GDP per capita even surpassed South Korea’s for the first time in 20 years in 2022. The government’s incentive packages also led to 1,400 companies investing more than NT$2.1 trillion in Taiwan from 2019 to last year.
However, Taiwanese manufacturers no longer focus solely on low-cost contract manufacturing. Instead, the success of the nation’s semiconductor industry and robust shipments of information and communications technology products amid an artificial intelligence boom has made developing high-value, high-margin products the core of domestic industrial transformation and economic value in the post-COVID-19 era.
Due to changes in global politics and economic situations, Taiwanese industries face pressure to transform. Lai’s economic platforms have focused on building an innovative economy and smart nation, involving accelerating the development of semiconductors and artificial intelligence-related technologies, promoting financial technology innovations, as well as continuing investments in green energy, cybersecurity and national defense. He also envisions a future where traditional industries thrive on value-added innovation, net zero carbon emissions and digital technology.
The president-elect also emphasizes policies that promote domestic service industry development, such as in hospitality and tourism, as the industry accounts for about 60 percent of Taiwan’s employment and plays an important role in supporting local small and medium-sized enterprises. Yet he still faces the same problems his predecessor faced, such as high home prices, a low national birthrate and a widening wealth gap. Furthermore, the difficult tasks of accelerating wage growth, creating jobs for young people and promoting talent development also await him.
The recent passing of Taiwanese actress Barbie Hsu (徐熙媛), known to many as “Big S,” due to influenza-induced pneumonia at just 48 years old is a devastating reminder that the flu is not just a seasonal nuisance — it is a serious and potentially fatal illness. Hsu, a beloved actress and cultural icon who shaped the memories of many growing up in Taiwan, should not have died from a preventable disease. Yet her death is part of a larger trend that Taiwan has ignored for too long — our collective underestimation of the flu and our low uptake of the
For Taipei, last year was a particularly dangerous period, with China stepping up coercive pressures on Taiwan amid signs of US President Joe Biden’s cognitive decline, which eventually led his Democratic Party to force him to abandon his re-election campaign. The political drift in the US bred uncertainty in Taiwan and elsewhere in the Indo-Pacific region about American strategic commitment and resolve. With America deeply involved in the wars in Ukraine and the Middle East, the last thing Washington wanted was a Taiwan Strait contingency, which is why Biden invested in personal diplomacy with China’s dictator Xi Jinping (習近平). The return of
The United States Agency for International Development (USAID) has long been a cornerstone of US foreign policy, advancing not only humanitarian aid but also the US’ strategic interests worldwide. The abrupt dismantling of USAID under US President Donald Trump ‘s administration represents a profound miscalculation with dire consequences for global influence, particularly in the Indo-Pacific. By withdrawing USAID’s presence, Washington is creating a vacuum that China is eager to fill, a shift that will directly weaken Taiwan’s international position while emboldening Beijing’s efforts to isolate Taipei. USAID has been a crucial player in countering China’s global expansion, particularly in regions where
Actress Barbie Hsu (徐熙媛), known affectionately as “Big S,” recently passed away from pneumonia caused by the flu. The Mandarin word for the flu — which translates to “epidemic cold” in English — is misleading. Although the flu tends to spread rapidly and shares similar symptoms with the common cold, its name easily leads people to underestimate its dangers and delay seeking medical treatment. The flu is an acute viral respiratory illness, and there are vaccines to prevent its spread and strengthen immunity. This being the case, the Mandarin word for “influenza” used in Taiwan should be renamed from the misleading