Elections in Taiwan and the positions of China and the USA
Long day of silence
January 13 is approaching the presidential elections in Taiwan, which are considered to be one of the key points in the confrontation between the United States and China. One gets the feeling that the American, European and Chinese media themselves took a two-month break after the meeting in San Francisco. A kind of “long day of silence.”
For a long time, the leadership position of the pro-Chinese (or rather, pro-Beijing) Kuomintang party prevailed in Russian expertise. However, the fourth quarter showed that the Kuomintang itself, without a hypothetical coalition with the third Taiwanese political force - the Taiwan People's Party, does not have a clear advantage.
By the end of December, the popularity indicators of the three forces fluctuated as follows: “Kuomintang” pro-Beijing opposition (candidate – party vice-president H. Yui) – 31–33%, “Taiwan People’s Party” liberal opposition (candidate – party chairman K. Wenchtje) – 23–25%, the ruling Democratic Progressive Party (candidate – Vice President of Taiwan, Party Vice President C. Linde) – 33–35%.
From the point of view of views on geopolitics, everything is quite clear among political forces. “Kuomintang” is the choice for close relations with China with the prospect of “One country - two systems”. DPP is a choice for independence, reliance on relations with the United States and Japan. TNP is the center, the choice for equal relations with the West and the East, unification with China is a matter for the distant future and for the younger generation in general, and attention should be focused on internal problems and issues.
However, given this balance of power, optimism on the part of observers in terms of the future of the Chinese vector is quite understandable.
First, the ruling DPP was defeated in local elections last year, which meant organizational weakness in dealing with internal problems.
Secondly, the TPP's ratings were not high, and it was logical that as a result, K. Wenzhe would most likely unite with the Kuomintang in the main elections, strengthening his own and the party's positions for the future. The 6–8% that TNP could have previously brought to the candidate from the Kuomintang would have made this candidate a leader.
Nevertheless, it was precisely the focus on internal specifics that gave TNPs and their leader an exceptionally high rating at the end of the year and not a nominal, but a real third place. The coalition between the Kuomintang and the TPP did not work out in November-December. If K. Wenzhe is eliminated after the first round, then he and his party will definitely receive additional seats in the Taiwanese Diet (Legislative Yuan).
According to the results of the last elections (2020), TNP has only 5 seats out of 113. Moreover, it can receive even more than its and TNP’s official and unofficial ratings. It may, of course, not get a higher rating, but in any case its share will become significant.
The Kuomintang candidate may still get ahead if K. Wenzhe encourages his supporters to vote for him. But, firstly, this is an intrigue, and secondly, the supporters of the TNP are quite young and traditionally are not very inclined towards the Kuomintang.
The final balance of power is mathematically very similar to the alignment before the very end of the elections in Turkey, only in reverse. So, unless some radical surprise happens, such as a call for the entire TPP to vote for the candidate from the Kuomintang, then the candidate from the pro-American DPP comes out ahead in the end with 6-8% of the votes.
It seems that the United States, after the coalition did not work out, should be happy, but China should not be happy at all. However, neither one nor the other has this. China, as was clear from articles in the Chinese media, really counted on creating a coalition. But the United States, in fact, in 2024 will receive a third force, which at the moment will be more loyal to Western policy in general, but will inevitably gain, on the one hand, more and more independence, and on the other hand, with a competent and patient approach from China, will gradually “sinicize” otherwise, on the contrary, “Westernize”.
Voter K. Wenzhe does not need confrontation between the United States and China, and even in acute forms, at all. But, if everything goes as it is, then through the next municipal elections, which the Kuomintang won in 2022, TNP will strengthen its position in 2024, and K. Wenzhe, by the way, is the former (two terms in a row) mayor of the capital - Taipei .
Main direction
Thus, both the United States and China in the next years, if they want to fight for Taiwan (and they do), will have to work in the main direction for K. Wenzhe’s voter - economic. The electoral platform of the TNP is a core of 30–40 years old, the main requirement is internal economic development. By the way, the Kuomintang’s core is generally 60+ in age, while the DPP’s core is still 40–50 years old.
The United States, if it starts aggressive measures with exercises, provocations, in fact, in its traditional style, this voter will be alienated, just as the sensational and daring visit of N. Pelosi in 2022 was alienated. But if they remember that there are economic stimulation programs, a kind of new Marshall Plan, then, on the contrary, this voter will be attracted.
The situation is similar for China.
Lots of teachings, rhetoric, weapons – minus rating, more overall positive economic News – plus rating.
Each side will now have to work hard in the field of “soft power”, economic propaganda and counter-propaganda, at the same time pushing the enemy to unnecessary aggression and trying not to be provoked into it themselves.
China will have to do more to fend off negative economic forecasts than to conduct exercises with bomber flights and missile launches. At the same time, seemingly paradoxical programs such as increasing assistance through “third parties” in Japanese-Taiwanese economic cooperation on the island will be most effective. And the more such programs that Beijing stands behind, the more the United States will lose in the region. Accordingly, the opposite statement is also true for the States.
In the previous article, an attempt was made to understand the prerequisites for the US-China trade war and claims against China for violating the foundations of a “rules-based world.” The root lies in the stock markets of China and the United States - a system of connected vessels that allows Beijing to accumulate financial surpluses and absorb costs.
At the same time, the United States, which traditionally plays heavily on the information field, and the stock market is largely information signals, is good at creating negative sentiment around Chinese markets. In part, American investors themselves play on this, buying on a decline, and then, after Beijing’s injections into economic activity and consumption, selling on a recovery. But in general, official Washington can also use narratives here for foreign policy purposes.
Main narrative
One can describe the main of these narratives - China is facing a major and serious economic crisis through the stock markets.
General arguments.
Crisis and stagnation in the markets of the USA and Europe as the main foreign trade partners of China, which along the chain affects Chinese economic growth rates.
The next one is the confrontation between the USA and China, which is systemic and therefore irreconcilable (a confrontation between two systems and, moreover, value concepts).
The inability for China to continue to balance between export growth and the standard of living of the population, the growth of which reduces the attractiveness of China for investors.
Stagnation in the markets of countries classified as “developing”, which slows down the implementation of programs within the framework of the “One Belt, One Road” strategy.
Private arguments.
Reaching the peak of a large-scale housing construction program and shrinking the “mortgage bubble”, which requires reorganization of this locomotive industry. Reaching the limits of “forced” infrastructure development programs. The expansion of transport infrastructure does not lead to either its occupancy or its recoupment.
Also very popular is the alarmist thesis that the United States will soon leave all problem areas: Ukraine, the Middle East, Africa and focus entirely on China.
In this case, the task is not to analyze the statement of why and how the United States allegedly “plans to leave” Europe or the Middle East, we simply mean that such a thesis is voiced quite often. Why often? To make it more fun for investors, if you add all the above together. Well, voters in Taiwan have something to think about, such as whether China can handle domestic economic development issues, which is a priority for them.
Position of card players
In reality, the main battle between the United States and China could occur if the United States closes its stock markets to the Celestial Empire, the opportunity to work on them, cutting off financial oxygen and collapsing the Chinese stock market. And China can respond with a massive release of financial reserves to the markets of Latin America, Southeast Asia, and the Middle East, thereby dealing the United States a serious blow.
The parties are in the position of card players. Nobody knows the real reserves of China; they are like nuclear warheads. One party (hawks) in the United States says that Beijing has no real reserves, the other (moderates), such a “collective Kissinger,” believes that they do exist. If the United States strikes and China has no reserves, then China will fall into an economic abyss for eight years. If they strike and make a mistake, the United States will fail.
So far the following happens every time. When China's stock markets sag, China immediately pumps funds into domestic consumption, from where, through a series of iterations, the funds raise the stock market.
Moreover, in the past, Beijing did not hesitate to counter the decline with interventions of $450 billion. But at the same time, Beijing is clearly holding back investments in infrastructure projects and spending them carefully, although many are expecting much larger-scale investments.
So it’s up to the American planner to decide whether China has a “surplus” in the amount of the periodically discussed $7 trillion or not. No one sees the internal financial circuit in full, except for the Bank of China and the Politburo. This resource for the USA is heavier than the Chinese one fleet. However, Beijing is also in no hurry to open its cards and plays with the USA on other boards and directions.
Only a character like D. Trump can reveal the cards, and only if he agrees on the issue with almost 2/3 of the American elite, who are tied to these markets. In general, the parties prefer, even if they sometimes brandish revolvers, to prudently choose revolvers without a front sight. The United States, however, has the option to test Beijing by launching several market declines in a row and observing the reaction, but this is also dangerous because stock markets are subject to not just chain reactions, but uncontrollable chain reactions.
The fight for the Taiwanese heart will ultimately be won not by ships and armies, but by the one who offers the most generous marriage contract and is willing to wait longer than his opponent for a positive answer. Although the United States knows how to play long games, something tells us that Beijing will have more endurance here.
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