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On December 21, Beijing unilaterally declared it would soon end preferential tariff terms for some Taiwanese exports to China, terms that were previously granted by the cross-strait Economic Cooperation Framework Agreement signed in 2010. Worst hit are Taiwan’s chemical exports, including exports of paraxylene, a chemical used to create polyester. Taiwanese officials called Beijing’s announcement “typical economic coercion,” but in one important aspect the move is highly unusual.
Politically motivated economic coercion against Taiwan is, of course, not new. It’s normal to see Beijing leverage economic punishment against select Taiwanese businesses and sectors for the clear purpose of registering its displeasure and shaping the political climate in Taiwan. High-profile examples in the past include a series of tax investigations in 2004 against Taiwanese conglomerate Chi Mei (which makes thin-film-transistor displays, among other technologies) and its business partners—seemingly because Chi Mei’s founder Shi Wen-long was a major donor to Taiwan’s Democratic Progressive Party (DPP). Another example is Beijing’s increased scrutiny of the Taiwanese restaurant chain Hai Bawang’s presence in China in late 2016. Hai Bawang was allegedly targeted because of supposed business ties to President Tsai Ing-wen’s family.
But those and other past instances of apparently politically motivated economic coercion against Taiwanese businesses took place after major Taiwanese elections. Those moves could, then, be interpreted as Beijing trying to make a statement more than trying to shape a particular electoral outcome.
This time is different. The recently announced termination of tariff concessions happened right before Taiwan’s election—and the move seems intended to shape not just the broader political climate, but also to influence specific election outcomes on January 13. Beijing’s explicit economic-electoral linkage vis-à-vis Taiwan is thus entering hitherto unchartered territory.
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Beijing’s Taiwan Affairs Office director, Song Tao, announced the broader spirit of this tariff move in a keynote address in early November. In the address to the Eleventh Yunnan-Taiwan Forum, Song explicitly linked cross-strait economic relations to Taiwan’s electoral outcomes when he said that Taiwan’s election is about choosing between two future paths: “between peace or war, and between prosperity or depression.”
However, Beijing’s direct economic-electoral linkage ahead of the election may end up being a double-edged sword. If the purpose is to influence the election’s outcome, then it could backfire because there is so little time left before the election. Nationalist sentiment in Taiwan could be immediately energized by Beijing’s moves. Meanwhile, the economic pain of Taiwanese businesses hurt by Beijing’s changes to the tariffs may take a while to be felt, and perhaps won’t materialize until after the election. Thus, the attempted coercion may drive more Taiwanese voters to back the more Taiwanese nationalist candidates—the very opposite of Beijing’s political objective.
If this is the case, then Beijing’s election influencing maneuver may once again be more about projecting to its internal audience the image of it actively “doing something” about what it views as unfavorable developments in Taiwan, and less about it trying to induce actual Taiwanese electoral outcomes favorable to itself.
That the performative aspects of Beijing’s Taiwan policy maneuvers could undermine its own political interests may speak to inter-bureaucratic coordination difficulties. It may also reveal internal pressure to be seen as “doing something” on Taiwan that is sufficiently high to compel Beijing’s Taiwan policy agencies to prioritize short-term theatrics over long-term interests.
In the final days before the January 13 election, Taiwan watchers around the world will eagerly look for signs of which party will come out on top. But after January 3, they will be walking in the dark. By order of Taiwan’s Central Election Commission, political parties cannot share public opinion data ten days before an election. This is intended to ensure that there is no major manipulation of data that would skew voters’ perceptions immediately before the election.
For those following the polls, polling companies have been reporting almost twice as often the last couple of weeks about who is leading the presidential race. They, too, are barred from publishing or commenting on polling data after January 3.
At this point in the campaign, there is nothing to suggest a major shift in opinion is imminent. Candidates are focusing more on smaller (but still heated) controversies around, for example, candidates’ assets and property holdings. Although some voters may still be undecided, odds are that many are already leaning strongly in one direction or another.
Of course, public opinion could change if a drastic event takes place before January 13. A major scandal could come to light, for example, or Beijing could attempt to sway public opinion through even greater coercive measures, such as building on the tariff changes mentioned above or through further military drills.
The challenge going into the polling blackout, then, is how to evaluate DPP presidential candidate Lai Ching-te’s seemingly small but meaningful lead over the Kuomintang candidate Hou Yu-ih. This is what makes these last ten days so challenging: Even though most voters have likely made up their mind, a shift of a few percentage points from Lai to Hou could still sway the election’s outcome. That small percentage will be difficult to predict in the final days before the election.
Lev Nachman is a nonresident fellow with the Atlantic Council’s Global China Hub and an assistant professor in the College of Social Science at National Chengchi University. He holds his PhD in Political Science from the University of California Irvine and is a former Taiwan Studies Postdoctoral Research Fellow at the Harvard Fairbank Center for China Studies.
Wen-Ti Sung is a nonresident fellow with the Atlantic Council’s Global China Hub. He is a sessional lecturer in the Australian National University’s College of Asia and the Pacific, and a member of the Australian Centre on China in the World.
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Image: Ko Wen-je, Taiwan People’s Party (TPP) presidential candidate, Lai Ching-te, ruling Democratic Progressive Party’s (DPP) presidential candidate and Hou Yu-ih, candidate for Taiwan’s presidency from the main opposition party Kuomintang (KMT), pose for a group photo at the first televised election address in New Taipei City, Taiwan December 20, 2023. Taiwan Central Election Commission/Handout via REUTERS
