Economy key issue in Taiwan vote

Taiwan President Ma Ying-jeou has overseen the most dramatic improvement in relations with China in the island's history, but economic anxieties could dash his re-election hopes in next Saturday's vote. The 61-year-old Harvard-trained lawyer faces Tsai Ing-wen, 56, who is vying to become the island's first female head of state and has campaigned, with some success, on a promise to distribute wealth more fairly. "The economy remains the most salient issue to a great majority of people, especially those in the low-income group," said George Tsai, a political expert at the Chinese Culture University in Taipei. "These people are not really concerned about improved ties with the mainland or diplomatic issues." Party politics in Taiwan has traditionally been defined by China policy, with Ma's Kuomintang (KMT) advocating closer ties with its giant neighbour, and Tsai's Democratic Progressive Party (DPP) leaning towards independence. Taiwan has ruled itself since the end of a civil war in 1949, but China still claims sovereignty over the island and has made it clear it will not shy away from all-out war to bring about reunification if need be. Despite this menace, mainland ties may no longer be a decisive factor in Taiwan elections, as many of the island's 23 million residents see China as something they can do nothing about anyway. "The China relationship remains an important issue on Taiwan, but its significance has been in a slow, slow decline," said Joseph Cheng, a China analyst at City University of Hong Kong. "Maybe it's because people understand the economic integration process will go on, and you don't want to rock the boat." Voter apathy over China means Ma, who is aiming for a second and last four-year term, is unlikely to benefit from his record in dealing with Beijing, despite achievements such as a sweeping trade pact signed in mid-2010. This is reflected in the last opinion polls allowed to be released before the election, which showed Ma leading Tsai by as little as three percentage points, on the border of the margin of error. "It's really too close to call, although Ma seems to have a slight edge, since the economy is not doing too badly," said Cheng. Taiwan's economy grew by 3.37 percent in the three months to September after expanding by a sizzling 10.88 percent in 2010 -- a 24-year high -- mostly fuelled by China, the island's main trading partner. This owes much to the shifting fortunes of the global economy, which have an immediate impact on the export-dependent island. Nevertheless, there is a clear note of frustration in the Ma camp, which believes voters do not give the government due credit for a respectable record. "All statistics indicate that Taiwan's economy is moving in a positive direction. Too bad this trend has been ignored by the media and the people," Ma's chief aide King Pu-tsung told reporters late last month. The biggest shortcoming in the KMT's policies for many voters is the lack of focus on the growing income gap in what has traditionally been one of Asia?s most egalitarian societies. The richest 20 percent are six times better off than the poorest 20 percent, a situation that Ma critics say has been worsened by closer economic ties with China, which especially benefit those with capital to invest. The Ma campaign has also been hurt by the emergence of a third candidate, former KMT heavyweight James Soong, who trails far behind the other two, but could take votes from the incumbent. It all adds up to the most uncertain election in Taiwan since 2004, when then-president Chen Shui-bian of the DPP won with a razor-thin margin, helped by a sympathy vote after he was injured in a mysterious election-eve shooting. Saturday's election will be watched carefully in Beijing, where Ma in all likelihood is the preferred candidate. While the Taiwanese population may be gradually losing interest in China, the reverse is not true, especially not at the highest levels. China is gearing up for a once-in-a-decade leadership transition and would prefer predictability in its immediate neighbourhood, said Liu Bi-rung, a political science professor at the Soochow University in Taipei. "It will take Beijing some time, at least a year, to observe what measures Tsai will adopt in dealing with the mainland (if she wins). Under such circumstances, ties between Taipei and Beijing will become stagnant," he said. "China obviously wouldn't like to see the Taiwan issue become a factor of uncertainty at a time when it is carrying out its own leadership transition."