ANNUAL REPORT

357
reduced visits to Taiwan by Chinese tourists. 1 So far, however,
Beijing has refrained from taking some of the more drastic costsimposing
measures it could direct against Taipei, such as enticing
countries with diplomatic relations with Taipei to cut ties and establish
relations with Beijing instead, or stopping the implementation
of cross-Strait agreements that were signed under the Ma Administration.
2
Taiwan’s 2016 Elections
Taiwan’s electorate achieved several milestones in 2016: the election
of Taiwan’s first female president, the third peaceful transition
of presidential power between political parties, and the DPP’s first
absolute majority in Taiwan’s legislature—the Legislative Yuan.
Tsai Ing-wen won the election with 56.1 percent of the vote, while
Eric Chu, the presidential candidate of the Chinese Nationalist
Party (Kuomintang or KMT), finished with just 31.1 percent. 3 DPP
candidates also won 68 seats in the Legislative Yuan compared to
35 seats for the KMT and 10 for other parties. 4
The election outcomes were the result of voter dissatisfaction
with the outgoing Ma Administration and the KMT as well as with
Taiwan’s struggling economy, President Tsai’s focus on domestic
economic issues (rather than cross-Strait relations) during the campaign,
and the rising concern among Taiwan citizens about the potential
negative impact of growing ties with China on Taiwan’s
economy and political autonomy. 5 According to Lin Chien-fu, a professor
in the department of economics at National Taiwan University,
who met with the Commission in Taiwan, the problem of
unaffordable housing in Taiwan also was an important issue for
voters. 6 The housing price to income ratio increased by almost onehalf.
7 Real wages fell following the 2008–2009 global financial crisis
and failed to recover to pre-crisis levels in subsequent years. 8
During President Ma’s tenure, which was characterized by a
thaw in some aspects of cross-Strait relations and a reduction in
overall tensions, Taiwan and China signed 23 cooperation agreements
and expanded economic, educational, travel, and government-to-government
contacts and communication. These initiatives
culminated in a meeting between President Ma and Chinese President
and General Secretary of the Chinese Communist Party Xi
Jinping in Singapore in November 2015, the first meeting between
the leaders of Taiwan and China since 1949. During President Ma’s
two terms in office, however, Taiwan’s economic growth slowed significantly
amid stagnant wages, unemployment in Taiwan’s largely
high-skilled workforce, weak entrepreneurial innovation, low inbound
investment, and an electorate increasingly worried about
China’s ability to influence Taiwan and the impact of agreements
with China on Taiwan’s economy. 9
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