Taiwan elections may give economy brief boost as US-China trade war threatens tech sector
- The gains made by the Beijing-friendly KMT in Saturday’s elections may help improve ties with mainland
- But longer term, the trade war and troubles in Taiwan’s electronics industry will continue to weigh on growth
Crushing local election defeats for Taiwan’s ruling party are expected to offer short-term respite to an economy that is otherwise “on a knife edge”, analysts say.
The Democratic Progressive Party suffered losses across the country at the hands of the Kuomintang, or KMT, which is seen as more friendly to Beijing, at a time when Taiwan is battling against a cyclical downturn in global consumption and heavy exposure to the US-China trade war.
The direct economic implications for the economy are likely to be minimal, given the business-friendly approach of both sides and the cross-party consensus on the importance of foreign investment in the Taiwanese economy.
The results may, however, help usher in a realignment in Taiwan’s policy back towards China after a tense few years in which the relationship has become increasingly sour.
The KMT won 15 of the 22 mayoral and county magistrate jobs up for grabs in Saturday’s elections, reversing a majority captured by the ruling DPP in 2014.
Unlike the independence-leaning DPP, the party has endorsed Beijing’s one-China policy, which it regards as a pre-condition for cross-strait dialogue.