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Taiwan election results key for businesses

Published January 13, 2012

TAIPEI, Taiwan (BRAIN)—Taiwan voters go to the polls this weekend to decide a close presidential race that bears implications for cross-strait relations between the island and mainland China.

Incumbent Ma Ying-jeou of the Chinese National Party, or the Kuomintang, is being challenged by the Democratic Progressive Party’s Tsai Ing-wen. A third candidate, James Soong Chu-yu of the People First Party, represents that party’s first-ever presidential bid. In the past four years, President Ma’s administration has eased relations between Taiwan and China, opening doors to Chinese tourists with direct flights from the mainland—previously Chinese had to fly through Hong Kong or Macau before arriving in Taipei—and signing the Economic Cooperation Framework Agreement (ECFA).

The ECFA, a trade pact that ended a 12 percent duty on bikes and most bike parts shipped from Taiwan to China, has already benefitted the cycling industry. Taiwan’s top two frame manufacturers, Giant and Merida, both realized significant increases in revenue from the Chinese market last year. Merida’s revenue from China was up 124 percent through October 2011 and Giant’s rose 40 percent through August. Rim maker Alex Global pointed to the ECFA when announcing that its turnover in China tripled last year. Taiwan exports about 3.8 million bikes annually to the global industry with the U.S. importing about 21 percent of those units. It also exports $480 million in bike parts.

Another term under Ma’s leadership could lead to further cooperation between Taiwan and China, which stands to boost the bottom line for Taiwanese businesses. But, Ma’s opponents believe closer ties across the Taiwan Strait threaten Taiwan’s future independence as the Chinese Communist Party strives to reunite Taiwan and China. Tsai and her Democratic Progressive Party have pushed for formal independence from China, which considers Taiwan a renegade province.

Voter turnout in Taiwan’s fifth democratic election is expected to be between 76 and 80 percent with the number of eligible voters around 18 million, according to the Taipei Times. The next president needs around 7 million votes to win. The Taiwanese cast their votes on Saturday.

——Nicole Formosa

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