Tsai Ing-wen is chairwoman of Taiwan's opposition Democratic Progressive Party and the party's nominee in the 2012 presidential election. The DPP's basic pro-Taiwan independence stance has left people wondering how it would deal with China were it to regain power next year. In a wide-ranging interview with CommonWealth Magazine, Tsai explained the 10-year policy platform her party recently introduced and her approach to managing relations with Beijing.

Following are highlights from the interview:

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Q: What are the values and spirit of the ten-year policy platform?

A: In the next 10 years, the world economy will be extremely volatile with a lot of uncertainty. We must, along with the rest of the world, face the problems of unemployment and resource allocation brought by globalization.

The significance of the ten-year policy platform is to identify potential dilemmas and use policies to handle them. Actually, policies are not hard to find, but the difficulty lies in figuring out where the appropriate policy tools exist and finding the political momentum to carry out the policies.

Political leaders must show political determination and political acumen to tackle conflicting interests generated by the changing environment. They must also identify good policies that limit the outbreak of such conflicts and unleash forces capable of moving the country forward.

Because presidential elections are held every four years, governments have often used short-term measures to solve long-term problems to gain favor with voters. But long-term problems require long-term solutions.

That is the idea of the ten-year policy platform. When it comes to policy, we hope to make the impossible possible.

Q: What is your vision for Taiwan in the ten-year platform?

A: The most important thing is employment. Employment is even more important than GDP. That's because today's GDP includes a lot that does not represent this country's economic activity. Economic activity that does not take place domestically cannot stimulate real employment.

But where does employment come from? Taiwan has a new industry that hasn't been developed yet – it's the industry of domestic demand. Foremost is modernized agriculture. 

Taiwan's farmers now average over 60 years of age. If there is a new agricultural population and new agricultural pattern, then agriculture can move toward a high-technology orientation modeled on industrial production.

One example is the "Raise Water, Grow Electricity" project in Pingdong County, where solar panels are positioned above land that is not suitable for cultivation and mushrooms are grown below them. This is agricultural technology.

People in their young working years will be able to get more easily acclimated to agricultural technology and create links to cities. They know what channels to use for their products and can therefore sell their products directly to the city. There is also the chance that recreational businesses will be developed in the process, which may even lead to clusters of writers and artists that extend into creative and cultural businesses.

The next area is the residential care sector. The government should turn the residential care sector into a system that provides residential care services. Beyond making use of domestic and migrant workers, the strength derived from mutual assistance provided by volunteers and people from the community can also be turned into an efficient and low-cost "care system."

In terms of industrial policy, small- and medium-sized enterprises (SMEs) should be allowed to play an important role in guiding Taiwan's R&D and innovation. In the next stage, if SMEs do not emerge as the main axes of economic development, the gap between rich and poor will continue to widen. So scientists, engineers and financial experts should join together in creating R&D-oriented SMEs that become vigorous sources of R&D and innovation in Taiwan.

Generally speaking, what the ten-year policy platform hopes to achieve is to adjust the economy so that wealth is redistributed and the income gap is narrowed through public provisions, social welfare, and employment policies.

Q: The impact of globalization is being felt at an increasingly fast rate, yet the things you want to do don't seem likely to have an immediate effect.

A: What everybody focuses on are immediate solutions. In the past three years, the Ma government has not launched alternative domestic-oriented industries. If we gain power, we will begin immediately.

If the government properly and fully executes its plan, results should actually be seen within five years.

Q: You have talked about long-term plans, but the middle class may care most about short-term issues.

A: The middle class is carrying a heavy burden. The biggest problem is the high cost of housing. In Taipei and New Taipei, there are many old communities. If those old communities are not renovated but new areas continue to be developed, these older areas will become rundown. In recent years, many districts have pushed for urban renewal. Why haven't they succeeded? Because homeowners and developers don't trust each other. Nobody has invested in public infrastructure, and nobody has come up with a comprehensive plan that makes residents feel secure.

In the future, we plan to set up a dedicated agency or legal entity with funding from the central government to encourage local governments to support urban renewal projects. The main target would be the renovation of old communities, especially infrastructure projects such as small parks and widening roads.

The central government can assist with the funding, and the dedicated agency will be responsible for planning and supervision. Once the government-sponsored urban renewal program begins, it will give architects more creative opportunities and spawn a new urban renewal sector.

The government would act as a bridge, participating in the overall plan and preserving public space, in building a community care system that could comprise a community child care center and a center to care for the disabled, and even leave some space for social housing for young people.

The biggest difference between the DPP and the Kuomintang is that we believe that some housing must be provided by the state. A goal of the ten-year policy platform, therefore, is to build a public housing market featuring only rentals rather than units for sale. The supply will reach 5 percent within 10 years and 10 percent over the longer term.

Through effective management, the plan will allow young adults or people who are not very mobile to live in a place with convenient transportation.

Also, the country needs to increase public services. From childcare and maternity services to elementary school, all need a certain level of public assistance. But we won't be left-wing to the point that the government fully finances the programs. Instead, we'll target gaps in the market. A key factor in the plan's success or failure will be the need for the government to properly manage its finances, and it has to have an efficient team.

Q: How do you deal with short-term demands?

A: All that can be done is to use subsidies, but once the policy has run its course, the subsidies must be ended. If politicians are not willing to put up with short-term hardship and start long-term planning, they'll never walk down that road.

Q: But next year if you are elected, you may take over an impoverished government with a shortfall in tax revenues.

A: We will propose a "fiscal balance planning law," which will require that the country's debt attains zero or negative growth within eight years. This principle must be respected. We cannot allow government debt to increase indefinitely, but it requires many policy tools and discipline.

I have always believed that the problem in Taiwan is not that there isn't enough money but that it hasn't been well used. Some problems are structural, such as the structure of the central and local governments, which has contributed to unending fiscal inefficiency. With power concentrated in the hands of the central government, local governments have never been able to make long-term plans. So we have to give local administrations more power and the ability to control their own sources of revenue for them to be able to plan for the medium and long term.

At the same time, the fiscal responsibilities of the central and local governments must be adjusted, because only local administrations understand what kinds of businesses best fit their regions. As long as they are given a lot of responsibility, we must protect their sources of revenue and enhance fiscal efficiency.

Q: Cross-Taiwan Strait policy is currently the area where the middle class is the most skeptical of the DPP.

A: The cross-strait trade and national security sections of the ten-year policy platform both tackle cross-strait issues. Basically, there are a few principles that cannot be avoided because there is only limited policy flexibility, so the key issue lies in the question of "treatment."

Treatment is more important than policy. But we must continue to maintain stability, and maintain balanced and stable relations with China, the United States, Japan and neighboring countries. This is most important.

Cross-strait trade relations don't only have implications for Taiwan and China. We need to view the question of cross-strait balance from a global perspective. There is no need to aggressively cut off contacts, nor is there the need to rush to full liberalization. Our biggest worries about the Ma government are, first, that it has been too aggressive and moved too quickly. A number of complementary and protective measures were not put in place, leaving doors open. Second, there is a complete lack of negotiating strength. The administration has allowed its domestic political ambitions, its very success or failure as a government, to ride on this issue, which means it has had very few bargaining chips when it has come time to negotiate.

How can a negotiator without bargaining chips protect his most fundamental interests?

As for concrete policy, cross-strait relations will inevitably become global. Before the ECFA was signed, I thought it was too early, but now that it's already been signed, transparency must be guaranteed. That's because China is a closed system, and in closed systems, there are many special factors and privileges. If the party serving as a counterpart is also a closed system, that spawns a system of "privileges" that democratic countries should not have.

So we must be transparent. Otherwise, cross-strait trade will ultimately only generate benefits for a small minority. Only with transparency can the benefits created by cross-strait contacts be widely distributed. Any disadvantages that trade creates must be reduced to a minimum through negotiations, and when they can't be avoided, complementary measures, including policy adjustments and protective measures, must be adopted.

For example, Chinese agricultural products are flowing into Taiwan and being mixed and sold with domestic agricultural products because they can't be told apart by their appearance. Of course, that has caused the price of local produce to fall.

Q: The impression most people have of how the DPP will handle cross-strait relations is carried over from the Chen Shui-bian administration. How would you be different from him?

A: When Chen Shui-bian became president, I was the head of the Mainland Affairs Council during his first term. More openings occurred during that era than at any time previously.

The Mini Three Links [transporation, communication and trade links between China and the outlying islands of Jinmen and Mazu] were my accomplishment. So were direct charter flights to China. Changing the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area from a "three no's" consciousness [referring to "no contact, no compromise, and no negotiations, a holdover from Taiwan's authoritarian era when ties with China were barred] to an open consciousness guided by the WTO was also something I achieved.

Haven't Ma Ying-jeou's liberalization policies been enabled by that cross-strait relations act? In fact, Chen Shui-bian maintained these fundamentals. His political predicament pushed him to speak in more strident tones, but his policies were relatively moderate. In the later stages, although things got a little tense, relations were still basically guided by the open structure under the WTO commitment.

Q: If you were to face the same "political predicament" Chen Shui-bian faced, would you handle it the same way?

A: No. My principle is very simple. In dealing with cross-strait policy, I will not base it on my own internal political exigencies. But I insist that for cross-strait negotiations, especially negotiations that are more political in nature, there must first be an internal consensus. If there is no domestic consensus, no matter what happens, negotiations will end in failure. Trust me, I have already been involved in negotiating for more than 10 years, and this is the most fundamental rule of negotiating.

Ma Ying-jeou's biggest problem is that he began negotiations before there was a domestic consensus, and he bet his domestic achievements and political accomplishments on the results of the talks. That left him without almost any bargaining chips at the negotiating table.

If everybody reaches a consensus at a certain level, negotiators at the negotiating table have the ability to give and take. Taiwan has always lacked political consultations and everybody has different positions. But a foundation that everybody can accept must be built out of those different views.

Translated from the Chinese by Luke Sabatier