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Tsai Ing-wen:

Election Win Will Shift China toward DPP


Election Win Will Shift China toward DPP


China policy has been seen as the Democratic Progressive Party's Achilles' heel in national elections. How does DPP chairwoman and likely 2016 presidential nominee Tsai Ing-wen intend to overcome the doubts?



Election Win Will Shift China toward DPP

By Sara Wu, Jung-Shin Ho, Hsiao-Wen Wang
From CommonWealth Magazine (vol. 551 )

The student movement that occupied the Legislature in protest of Taiwan's trade-in-services agreement with China helped propel Tsai Ing-wen back to the top of her Democratic Progressive Party (DPP), improving her chances of representing the "pan-green camp" led by the DPP in the 2016 presidential race.

Her presidential campaign in 2012, in which she lost to the incumbent, President Ma Ying-jeou, by about 6 percentage points, floundered in part because of her inability to convince voters that the DPP had a viable policy on China.

In an exclusive interview with CommonWealth Magazine, Tsai argued that China most fears "betting on the wrong horse" and that if the DPP does well in year-end local elections around Taiwan, Beijing will have to shift its leanings more toward the party. She expressed confidence that a change in the ruling party would not affect relations with China.

Following are highlights from the interview:

Q: Taiwan's economic development is facing a bottleneck. What solutions do you have?

A: We need to establish a new economic development model that has several elements that are different from the past.

First, emphasizing creativity and innovation to create value-added. That's a must if society hopes to produce services and products of high value. This is the only way salaries can rise and companies can have boundless room for growth.

Second, the drivers of the next generation of economic development momentum will be new small and medium-sized enterprises (SMEs) that have strong knowledge and technology components. That's because only SMEs effectively distribute wealth and are flexible when it comes to location.

Third, those driving the next generation of economic development will be people with brains rather than people with money. We have to develop a system that enables smart people instead of people with capital to lead economic development.

Fourth, economic development must be oriented toward entrepreneurship.

A while ago, I was having a conversation with a group of young people. I asked them, "Haven't you been saying that we should be 'rescuing our country by ourselves'?" I said it was time to "create our jobs by ourselves!"

Failures Provide the Foundation for Success

After the end of World War II, there were few job opportunities in Taiwan. During my father's generation, they created their own businesses and job opportunities. Taiwan now faces a similar situation.

Future knowledge-oriented enterprises will have flat organizational structures, with some people leading and others being led. It's essentially a "flat" team in which everybody is equal and decisions are made together.

If people with knowledge are stuck at the bottom of a big company for a long time, they will not be able to accept it because the environment in which they've grown up has been relatively free and open. They are not like the Japanese salarymen of the 1950s and 1960s who spent their working lives rising up the corporate ladder step by step. That is no longer the type of job this generation of young people wants.

I originally thought that the "flat organization" model was lacking in Taiwan. But after the student movement, I am more optimistic. If you saw the young people in the movement gathering in corners to discuss things, there was always somebody who stood up to lead the discussion. Our next generation has that kind of energy.

The last point is that this kind of innovative, creative and entrepreneurial economy requires us to see failure in a positive light. In Silicon Valley, the more somebody fails, the more they are respected, because it means you are building a foundation for success.

Q: To be able to develop this new economic model, I assume you support capital gains taxes and taxes on gains from sales of stock, and oppose tax incentives.

A: That's the next stage. We need to look at these policies one by one. Of course, I have my own policy preferences, but I want to go back and look at each of them.

For example, I really dislike using tax breaks, but if the government wants to use cash subsidies to encourage (certain actions), that's visible and can be seen. With tax breaks, it's hard to calculate their cost to the government. Also, that wastes the discretionary power given to administrative agencies.

The reason I don't like arbitrarily granting carte blanche authority is because such authorization is not normal in a democratic society. In a democracy, nobody wants to be the bad guy. Once you give people a blank check, you don't have any form of control.

Q: You argue that tax cuts as a form of short-term stimulus should not be used anymore and that the focus should be on education, culture, and policies to support entrepreneurship. Those all require a long time to cultivate. But can Taiwan tolerate a transition period of three to five years of low economic growth?

A: If Taiwan's economy needs short-term stimulus, then we would have to do it. But short-term measures cannot become long-term, and long-term ones cannot go on forever.

Just look at the tax breaks contained in the Statute for Upgrading Industry. They were seriously flawed. After a certain point, they should have been phased out. The Ma government is arguing, for example, that the free economic pilot zones will only be a transitional measure, but once they go forward, it will be a 10-year project at the very least.

Q: You just mentioned blank authorization. Some have charged that when you headed the Mainland Affairs Council and overhauled the Act Governing Relations between the People of the Taiwan Area and the Mainland Area, you were in fact advocating blank authorization.

A: That is the Kuomintang taking history out of context again. Before I took the post, the Mainland Affairs Council had unchecked authority, but I turned half of the authority over to the Legislative Yuan. I did that at the time because the cross-strait relations we inherited were still in the era of the KMT's "three no's" (no contact, no negotiation, no compromise), the era of "No Haste, Be Patient." With time and changes across the Taiwan Strait, authority had to gradually be handed over to the Legislature.

Since 2008 (when President Ma Ying-jeou took office), we have consistently advocated giving the Legislature oversight authority because the speed, frequency and scale of cross-strait exchanges were getting faster and bigger, necessitating stronger supervisory powers. The bill we have submitted on overseeing cross-strait agreements has been blocked by the KMT 108 times.

Q: Facing a counterpart such as China, which talks tough with Hong Kong but seems softer on Taiwan, won't it be harder to negotiate when there is legislative supervision?

A: It was difficult to handle to begin with. Just because there are difficulties, you can't forget that this is very important to Taiwan and that many people need to be in on it together.

But I agree that there should be completely transparent rules, and that when each side participates in the decision-making process, they all must act rationally.

Q: That sounds ideal, but isn't putting it into practice hard?

A: Think about it. If the U.S. president wants fast track authority, he has to spend a lot of time persuading Congress to get it. But the Congress uses a relatively rational attitude in dealing with the request. The American president gets fast track authority sometimes but not others.

Q: So when Taiwan and China negotiate agreements, you insist that the Legislature must be involved?

A: The Legislature must participate. If only executive power participates, executive power is entirely in the president's hands. If I'm China, all I have to do is put pressure on a single person, Taiwan's president, and Taiwan will have to cave in.

No Exclusive Agent on China Relations

We have to be careful on cross-strait relations not to allow the KMT to become the exclusive agent for those relations.

Q: How do you plan to handle the DPP's Taiwan Independence Clause?

A: The most important thing for the two sides of the strait is to develop continuous and stable relations. Should the building of bilateral relations begin with the Taiwan Independence Clause? That's something that can continue to be discussed. At this point, the two sides should develop better mutual understanding and increase the degree of mutual trust, especially by not allowing the KMT to monopolize the right to interpret cross-strait ties.

Q: When Tainan mayor Lai Ching-te went to Shanghai, he asked Chinese officials to understand that "Taiwan's future will be decided together by its 23 million people." You issued a statement praising that.

A: Our fundamental position must be maintained. That is that Taiwan's future will be decided by its 23 million people.

Q: Does that mean that from now until 2016, the DPP's "Taiwan Independence Clause" and the "Resolution on Taiwan's Future" won't have to be adjusted?

A: The "Resolution on Taiwan's Future" represents a general consensus within the DPP. How we build on the consensus, we'll have to see. To some extent, the "Resolution on Taiwan's Future" actually represents a consensus in Taiwanese society.

Q: Broadly speaking, how would you handle cross-strait relations?

A: I have to admit that from 2008 to 2012, the party was focused on contesting elections and spent very little time on taking care of external matters. Now, both subjective and objective conditions are better than they were in 2012. We are also confident that we can maintain stable relations with China so that cross-strait relations would not be affected by a change in the ruling party.

If you were China, how would you view this round of elections? In the previous round, they were afraid of making a bad bet. They had put their money in 2008 on the KMT, and if the situation had been reversed in 2012 (i.e., the KMT and Ma had lost to the DPP and Tsai), then that would have indicated the failure of all of its Taiwan policies and led to the resignations of many people. And Hu Jintao's historical legacy would have had to be rewritten. So they were very nervous. They felt pressure to protect Ma Ying-jeou and not allow the tables to be turned in Taiwan.

But after 2012, a new phase has begun. China is now again worried about betting on the wrong horse in 2016, being forced to deal with a situation it cannot control and having to interfere heavily.

Simply put, whoever has power, different parties will shift their direction toward those with power. The DPP's biggest challenge is to do well in this year's local elections. If we do well, even China will shift in the direction of the DPP. If they feel that the DPP has the best chance of winning in 2016, they will automatically create the conditions for that.

In my experience, when China wants to do something, it is able to do it. It has a huge system to handle Taiwan issues. If China shifts course, the United States will have no reason to object.

Maybe we can adjust things so that we and China move out into the world together. In the past, we joined the WTO together with China, and in the future, we can join the RCEP and TPP with China as well.

Q: Do you agree that global trade integration is the trend?

A: Regional economic integration is the trend, and you have to face it whether you like it or not. But you want to turn this trend to your advantage rather than simply trying to minimize the damage it does to you.

The Regional Economic Integration Trend

For regional economic integration to be beneficial to you, the most important factor is having industries that are strong enough. The countries that have been the winners in globalization are those with industries that have been able to adjust very quickly.

If you are incapable of changing, all you can do is try to limit the damage and block things sector by sector. That's a very painful process.

Q: You have been involved in politics for 14 years. What changes have you made?

A: There have of course been major changes.

I was involved in negotiating for a long time. Negotiators have a few basic skills. First, you cannot get too emotional. Second, your face can't reveal too much. (And third) you cannot cut off all possibilities right from the start; you have to leave all options open. When you hear me speak, I don't reject anything outright. I will tell you what my inclination is. In politics, issues are far more often relative than absolute.

Maybe people think I'm not direct enough, but that's to leave some leeway for others, the possibility of an opening.

Q: Former president Lee Teng-hui says you lack courage.

A: Well who do you think had more courage, Thatcher or Merkel?

Q: Merkel.

A: That's right! (laughs)

Q: People still say you are the "female version of Ma Ying-jeou." How do you feel about that?

A: I can't believe that people who say that don't have a political motive. We may have some similarities in our educational backgrounds, but our basic values and orientations are very different. And our attitudes toward people are very different.

I am very sincere to people, and I don't deceive people. I don't promise things that I can't achieve.

Translated from the Chinese by Luke Sabatier