16 January 2024Taiwan concluded its latest round of elections over the weekend, with Mr Lai Ching-e of the Democratic Progressive Party (DPP) winning the Presidency with 40.1% of all votes (5.6m, Figure 1), beating the KMT’s Mr Hou You-ih (33.5%; 4.7m) and the TPP’s Mr Ko Wen-je (26.5%; 3.7m). The margin of victory for Mr.Lai was better than in the last opinion poll, though narrower than that for outgoing President Tsai in 2020. This is the first time since Taiwan began holding direct Presidential elections in 1996 that any party has held power beyond two four-year terms.None of the three parties contesting the elections for the Legislative Yuan managed to secure an absolute majority (Figure 2). It is the first time in 20 years that the President's party has failed to secure an absolute majority in the legislature, and the first time that a third party – TPP with 8 seats – gets the balance vote. Following the results, the new President-in-waiting has talked about "the need to work across party lines, calling for communication, consultation, participation, and cooperation, under a new structure of the legislature.”The new Legislative Yuan will begin its session on February 1st with the election of a new House Speaker and Deputy House Speaker, while the new President will be inaugurated on 20th May.Implications for cross-strait relationsThe election result should not, in and of itself, move the needle in any material fashion on the market's perception of cross-strait relations. The initial response from key stakeholders has been well contained.nThe President elect has argued for maintaining the status quo on cross-strait relations. In his victory statement, he appealed to China to find ways to communicate and lower tensions. As long as the "two sides could face each other in dignity and parity", Mr.Lai said he hoped to “replace confrontation with dialogue and confidently pursue exchanges with China." He also avoided mentioning President Tsai's 'four commitments' framework for cross-strait relations.nBeijing's initial response has also been relatively muted, with no direct criticism of the new President-elect. In his initial comments post the elections, US President Biden has stated that the US does not support independence for Taiwan, while reaffirming the one-China policy.nUnlike in the first two terms of DPP Presidency, the party no longer holds a Perry KojodjojoStrategist+852-2203 6153Deutsche Bank AG/Hong KongIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. MCI (P) 041/10/2023. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.Deutsche BankResearch Asia China Taiwan Foreign Exchange Asia Macro Strategy Notes Date TWD: Post election thoughtsDistributed on: 16/01/2024 04:29:08 GMT7T2se3r0Ot6kwoPa16 January 2024Asia Macro Strategy Not...
