[PRIMER] TAIWANESE ELECTIONS ON JANUARY 13TH
Analysis details (08:08)
OVERVIEW:
- Taiwan will head to the polls on January 13th in what could be an election which affects the country’s democracy, and with it, relations with China, the US, and Europe.
- The main issue lies with the geopolitical stances of the three main candidates – the first a “pragmatic worker for Taiwan independence”, the second a Beijing-friendly candidate, and the third a China-neutral contender. The winner will be succeeding the two-term leader - the Democratic Progressive Party’s (DPP) Tsai Ing-wen.
- Tensions between Beijing and Tapei have escalated throughout her eight years with Chinese warplanes and balloons crossing the Taiwanese strait’s median line - an unofficial barrier between the two sides.
- In his New Year address, Chinese President Xi suggested “reunification of the motherland is a historical inevitability.”
MARKET IMPLICATIONS:
- In short, the election is seen as a fight for regional influence between China and the US, with participants’ focus being Beijing's reaction to the results. From a market perspective, the geopolitical implications, alongside the subsequent influence on defence and semiconductor sentiment, will likely be eyed the most.
- Taiwan is a major player in the semiconductor industry, with companies like TSMC (2330 TT/TSM) playing a pivotal role in global supply chains as the largest contract chip manufacturer – with top customers including the likes of Apple (AAPL), Qualcomm (QCOM), AMD (AMD), Broadcom (AVGO), Nvidia (NVDA), alongside many more.
- “The nightmare scenario for global security would be a regional conflict centred on an island that makes more than 90 per cent of the world’s advanced microchips, vital for everything from iPhones to electric vehicles”, says Politico.
- Other desks believe that the worst-case scenario would be a status-quo government and should not materially alter relations with China in the near or medium term.
MAIN CANDIDATES:
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Current Vice President Lai Ching-te (or William Lai) of the Democratic Progressive Party (DPP) is narrowly front-running the race. Lai is looking to succeed outgoing President Tsai. Beijing has been critical of Lai and his pro-independence stance. Lai’s Vice President candidate has served as Taiwan’s de-factor ambassador to the US. Lai seeks to shore up relations with the US, and Europe, alongside other democracies. Domestically, Lai is most appealing to independence supporters, but he has also been popular with centrist voters in the past. -
Hou Yu-ih from the Kuomintang (KMT) party – Lai’s main rival – has a friendlier stance towards Beijing and advocates talks with the Chinese Communist Party to lower cross-strait tensions. Hou has in the past been a subject of scepticism and tensions from pro-Chinese hardliners within his party for not being of Chinese descent. That being said, desks suggest he appeals to voters outside the party’s traditional base, which consists of mainland immigrants and Chinese descendants. -
Ko Wen-Je from The Taiwan People’s Party (TPP) claims neutrality on the China stance, whilst the candidate is also said to be popular among the younger voters. Ko dubbed himself as a “rational” and “scientific” technocrat and has focused more on domestic concerns such as energy and housing than relations with China, according to The Economist, which also suggests his China policies are closer to that of the KMT party.
POLLS: There is a ten-day blackout period on polls in Taiwan in the run-up to the elections. The latest poll via the Economist (updated on January 2nd) shows DPP’s Lai leading with 36%, KMT's Hou second with 31% and TPP's Ko trailing with 24%.
PROCESS:
- The election will be in the form of a simple one-round first-past-the-post, with the candidate with the highest number of votes being the winner, irrespective of the turnout or share of votes.
- Around 19.3mln out of Taiwan’s 23.6mln population are eligible to vote, with 1mln voting for the first time.
- As soon as polls close at 16:00 local time (08:00 GMT), counting will begin and the tally will be continuously updated, thus clarity on the winner will likely come before the final announcement.
- The results of the last election were announced around 22:30 local time (14:30 GMT).
09 Jan 2024 - 08:15- EquitiesResearch Sheet- Source: Newsquawk
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