No. 19, Aiguo W. Rd. in Taipei. A crowd has gathered in the lobby of the campaign headquarters of Kuomintang (KMT) presidential candidate Ma Ying-jeou and his running mate Vincent Siew. The group, composed of legislators, former government officials, members of the campaign team, and party workers from southern Taiwan, is congregated outside the 3-square-meter elevator, waiting to squeeze inside. As the elevator heads upward, those gathered outside take notice when the indicator for the 12th floor lights up.

The 12th floor is Ma’s office, the KMT campaign’s nerve center. It is considerably smaller than the offices Ma occupied as Taipei mayor and KMT chairman, but crowded with far more visitors. They filter into the office one-by-one, with a new group showing up every 40 minutes.

In another part of Taipei, at the “Taiwan Restoration Hall” on Chang’an E. Rd., security guards are standing attentively outside and motorcyclists stop for a look when passing by. Inside, Democratic Progressive Party (DPP) candidate Frank Hsieh and running mate Su Tseng-chang are holding a news conference, with loud shouts of “president, vice president” emanating from all corners of the room. Those who shake the hands of the candidates gush with excitement.

Power naturally secretes hormones that draw people toward it, attracting the attention of the curious or those thirsting for leadership.

“Politics is performance,” and at election time, politicians are all actors ? and idealists. The question that will ultimately be decided, however, is whose vision of where to take Taiwan meets the needs of the people and, on the other hand, who has the right strategies and policies for running the country.

Based on CommonWealth Magazine’s interviews of the two candidates and an analysis of their political positions, the two candidates seem to have some similarities.

They both advocate more open and pragmatic policies to boost the economy, and want to expand Taiwan’s economic influence to East Asia and the rest of the world. In terms of cross-strait trade and investment, they both favor relaxing the longstanding cap on Taiwanese firms’ investment in China, opening Taiwan to more Chinese tourists, and allowing Chinese capital to be invested in various domestic sectors.

But the two candidates also have clear differences, reflected in their diverging values and policy proposals.

Facing China: Optimism vs. Skepticism

In terms of the country’s status, Hsieh does not accept the idea of “one China under different interpretations,” favoring instead an ultimate goal of a sovereign and independent Taiwan. Ma, on the other hand, recognizes the “1992 Consensus” and hopes for closer ties and greater integration between China and Taiwan.

Although both stress that they would set aside discussing the country’s status after taking office, their attitudes and stances toward China nonetheless reflect differences based on their values.

Ma remains an optimist while Hsieh, despite his campaign theme of co-existence, is more skeptical and sees more risks in dealing with China.

The difference in attitude is seen through how the two would handle the existing restriction limiting Taiwanese firms’ investment in China to no more than 40 percent of their net worth, a main focus of debate in the campaign. Hsieh stresses that he would replace the policy with a system where applications to invest in China would be managed on a case-by-case basis, arguing that such a policy would prevent companies from leaving behind their debts in Taiwan and help keep certain manufacturing industries and factories at home. Ma, on the other hand, says he is leaning toward eliminating the cap for companies that keep their headquarters in Taiwan.

“The two sides of the Taiwan Strait resemble two teacups. If they are linked with a pipe, money will flow away from the richer side to the poorer side, and people will migrate from the more populous side to the less populated one,” Hsieh says, arguing that a wider opening would lower wage and salary levels in Taiwan and affect social order.

Ma more optimistically suggests that Taiwan’s economic bloodlines should be opened without obstructions, and that Taiwan must push aggressively for closer ties with China. Direct flights, he argues, “would win back the hearts” of Taiwanese businesses invested in China, and opening Taiwan to Chinese investment would boost the country’s prosperity.

National Policies: Left-leaning vs. Center-right

Another big difference in values between the two is reflected in their domestic policy proposals, with one candidate leaning to the left, the other to the right.

Although both stress economic development, environmental sustainability and social justice, their different priorities in an era when resources are limited reflect their diverging values.

Ma’s order of priorities is development, sustainability and social justice, with an emphasis on high economic growth as the primary goal. He believes that economic growth is essential to achieving greater wealth distribution equality and social justice. Hsieh believes, on the other hand, that caring for disadvantaged members of society should not be a function of economic growth, but if a choice had to be made between growth and social justice, his priority would be to reverse the trend toward an M-shaped society.

Size of Government: Expansion vs. Contraction

The two also differ on how many departments the executive branch of government should have.

Hsieh believes the number of ministries should be reduced to about 13, while Ma suggests expanding the number of government agencies by adding a cultural tourism ministry, a maritime affairs ministry and an anti-corruption council, among others.

Ma is also taking a page from the KMT’s past formula for success, pledging to expand public infrastructure projects to boost the economy. But such a strategy will face challenges in the future.

Hsin Ping-lung, an associate professor in National Taiwan University’s Graduate Institute of National Development, worries that the time is not right for expanding public works projects. He contends that expanding public infrastructure is only applicable when a country’s resources are idle or underused, which is not the case in Taiwan at present. After tenders are opened to international bidders as part of the trend toward globalization, Hsin says, it is possible that those making money from the projects will be foreign companies, with the economic benefits not necessarily finding their way back to Taiwan’s people.

Where Will the Money Come From?

The policies of the two presidential candidates hope to spur economic growth while balancing income distribution. But Taiwan has serious financial dilemmas awaiting whoever is elected president.

Mon-Chi Lio, an associate professor in National Sun Yat-sen University’s Department of Political Economy, likens Taiwan’s pending financial predicament to “a game of Russian roulette about to be acted out.”

Taiwan’s government has accumulated over NT$13 trillion in public debt, and Peacetime Foundation of Taiwan executive director Chien Hsi-chieh has repeatedly bemoaned the government’s tendency to spend the money of the next generation. He suggests that if Taiwan’s tax system is not reformed, a crisis will result.

The average tax burden of Taiwanese taxpayers has fallen from 18 percent 13 years ago to 13 percent today, well below the average 18 to 20 percent considered standard for the operations of a normal country.

During this election campaign, however, both candidates have proposed cutting, not raising, taxes, and the DPP administration recently decided to submit a measure to the Legislative Yuan, to take effect in 2010, that would cut corporate tax rates from 25 percent to 17.5 percent, and increase deductions and lower rates for individual income taxes. Many economists are privately skeptical whether economic development and social welfare can be bankrolled simultaneously under current financial conditions, and believe that, in the end, any new government will have to set policy priorities.

Worth noting, however, is that both candidates recognize the overall direction that Taiwan must follow in the future: innovation, research and development, expansion into world markets, and elevating Taiwan’s position in the global value chain.

In the end, the people will decide who wins the political race. Voters are not only closely examining the promises made by the candidates, but also evaluating the sincerity behind the promises, because integrity is the ultimate foundation of power.

Translated from the Chinese by Luke Sabatier

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Chinese Version: 治國戰略大對決