Factbox – Challenges facing Taiwan’s President Ma Ying-jeou

04-Jun-2012 Intellasia | Reuters | 7:01 AM Print This Post

Taiwan President Ma Ying-jeou told Reuters on Friday he was hopeful China’s next rulers would maintain improving relations with the island and that Beijing’s anointed leader, Xi Jinping, would keep economic cooperation on track.

Following are some of the challenges for Ma’s second term.

CHINA TRADE, ECONOMIC TIES

Ma’s China policy is nearly totally dependent on the economic rapprochement with China he has fostered since taking office in 2008, which has seen business ties and trade boom and brought economic benefits to Taiwan.

Approved Taiwan investment in China was $13.1 billion in 2011, up 33 percent from $9.84 billion in 2008, the year Ma took office. Overall officially recognised Taiwan investment in the mainland has totalled $115 billion since records began in 1991. Exports to China reached $124 billion last year, 25 percent above 2008′s $99.5 billion.

As a percentage of total exports, those to China have almost doubled in the last decade while those to the United States have halved.

While most in Taiwan like the economic benefits, there are concerns that China, which has never renounced the use of force to take back Taiwan, will be seeking political payback from Ma in his second term in return for its economic support.

GEOPOLITICS

Both China and the United States breathed a sigh of relief when Ma and his ruling Nationalist Party were re-elected, but Taiwan remains an irritant in superpower relations.

A recent vote by the US Congress on a bill amendment that would mandate sales of advanced jet fighters to Taiwan is just the latest tension.

The US is the biggest backer and main arms supplier to Taiwan, which is self-ruled after the Nationalists lost control of the mainland to Mao Zedong’s Communists in a civil war and retreated to the island in 1949.

Ma has further stirred controversy at home with his adoption of the concept of “one country, two areas” as a basis for Taiwan-China relations. He has defined the “one country” as the Republic of China, Taiwan’s formal name, but the opposition has said the concept implies that Taiwan is already a part of China.

A big unknown is whether China’s policy towards Taiwan will change when the mainland’s top leadership changes later this year, and Communist Party chief and President Hu Jintao is due to hand the reins to heir apparent vice President Xi Jinping.

IT’S THE ECONOMY

Ma’s biggest challenge, many analysts say, lies not in cross-Strait relations but managing the economy at home against an increasingly unfavourable international backdrop.

Exports, the main driver of growth, have fallen for two straight months amid a global slump. The government cut its GDP forecast for 2012 for a fourth time in April to 3.38 percent and raised its inflation forecast to 1.94 percent from 1.46 percent.

Many voters are concerned by rising food prices, with vegetables up some 30 percent in the first four months of this year, as well as a lack of affordable housing for average wage earners and slow wage growth.

The average salary in Taiwan, excluding bonuses, stood at T$37,360 ($1,300) a month in March, barely changed from T$36,612 the same month a year ago and not much higher than the T$33,953 for the year 2000. The average house price stood at about nine times annual income towards the end of last year.

DOMESTIC DISCORD

Ma’s popularity has tumbled since his election win after a series of controversial policy announcements and flip flops that have left the government appearing disorganised and lacking in leadership. Tens of thousands of protesters took to the streets on inauguration day on May 20.

A rise in state-controlled fuel prices was the first to hit in April, followed shortly by the announcement of a rise in electricity prices. The government then revealed a capital gains tax that also would cover profits on stock trading, after initially saying the tax was only up for discussion.

It also has said it planned to lift a ban on imports of US beef containing a leanness enhancing additive, prompting street protests in March.

Ma later watered down the electricity price rise plan, and was forced to contradict lawmakers in his own party over the tax bill, insisting it would be discussed in the present session of parliament. Lawmakers had said it would not be debated.

A later revision to the bill by the ruling party triggered the resignation of its author, Finance minister Christina Liu, after only four months in the job, throwing the administration further into disarray. ($1 = 29.53 Taiwan dollars)

http://uk.news.yahoo.com/factbox-challenges-facing-taiwans-president-ma-ying-jeou-084605982–business.html

 


Category: Taiwan

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