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The year 2020 started with President Tsai winning a second term and the DPP obtaining once again a parliamentary majority in the general elections held on 11 January. By the end of the year, Taiwan emerged as one of the few polities able to effectively put the COVID-19 pandemic under control. More impressively, it was able to do so without resorting to lockdown strategies, relying instead on timely decision-making and effective tracing, testing, and treating. Taiwan’s success, in turn, amplified the island’s relevance in Asia-Pacific international politics. Foreign support for expanding its access to international organizations, and especially the WHO in light of the pandemic, reached new heights, but it met Beijing’s vehement pushback. Chinese military pressure, a constant across the Strait since 2016, reached new heights, as the PLA Air Force routinized operations within Taiwan’s Air Defence Identification Zone. The policies of the outgoing Trump administration, which accelerated the freefall of Sino-American relations and continued to dramatically expand the scope of Washington’s relations with Taiwan, further exacerbated cross-Strait relations. The worsening security environment, however, did not hinder a Tsai administration buoyed by the successful management of the pandemic, economic growth, and widespread refusal of China’s strategy for unification among the public. Conversely, the KMT, Taiwan’s major position party, after a brief flirt with populist politics with the failed presidential candidature of Han Kuo-yu, continued to struggle under the new leadership of Johnny Chiang. Post-electoral calls for reforming the party and move its China policy away from the 1992 Consensus did not produce any meaningful change.

Keywords – Taiwan; cross-strait relations; COVID-19 pandemic.

1. Introduction

This study reviewing the major political and economic events occurred in the Republic of China (ROC) – Taiwan in 2020 partially deviates from the standard Asia Maior template, in light of the essay published in the previous volume, which covered the results of the general election held on 11 January 2020 and its immediate aftermath together with the events of 2019.1 Consequently, this essay explores major developments in the fields of cross-Strait relations, international politics, and domestic politics and economics by taking the central government’s management the COVID-19 pandemic as the entry point for a yearly review. The essay consists of four sections in addition to this introduction. The first covers the management of the viral outbreak on the island during the first year of the pandemic. The second tackles cross-Strait relations in the aftermaths of the 2020 elections, with a focus on the politicization of the pandemic by both Taipei and Beijing. The essay continues with an analysis of Taiwan’s external relations, with a focus on the US-Taiwan relation against the backdrop of the end of the Trump administration, Joseph Biden’s victory in the American presidential elections in November, and the freefall of Sino-American relations. This segment is followed by a brief panoramic of Taipei’s relations with other major actors in regional and international politics, in particular Japan and the European Union (EU) and its member states. The final section focuses instead on domestic and economic policies. First, it provides an overview of the yearly performance of the Taiwanese economy and of the economic policies of the administration of President Tsai Ing-wen (蔡英文). Successively, it analyses the troubled attempts of the major opposition party, the Kuomintang’s (KMT, 國民黨), to reboot its China policy in the wake of the general elections defeat.

2. Taiwan’s successful response to the COVID-19 outbreak

Taiwan emerged as one of the few unquestionable «champions» in the public health management of the COVID-19 pandemic. By 31 December 2020, it recorded only 799 cases and 7 deaths among a population of 23.57 million.2 It also experienced the longest streak without a domestic infection on record, between 12 April and 22 December.3 Impressively, Taiwan was able to manage the outbreak without adopting mandatory lockdowns, relying instead on timely and highly effective measures of testing, treating, and tracking of COVID-19 cases since the very beginning of the outbreak in the Mainland are of the People’s Republic of China (PRC). The political, social, medical, and bureaucratic experiences gathered in the struggle against SARS in 2003, together with a high degree of discipline and social cohesion among the populace, itself bolstered by sophisticate and skilful government communications, further contributed to this success.

As noted by Yasuhiro Matsuda, this successful response in containing the pandemic also presents a unique feature: Taiwan’s unparalleled ability to monitor developments and gathering information and intelligence from Mainland China.4 Taiwanese state media began to report news of a «pneumonia of unknown origins» in Wuhan as of the third week of December 2019; while official inquiries to Chinese authorities and reports to the World Health Organization (WHO) were submitted before the end of 2019. The first screening measures for travellers arriving from Wuhan were also implemented as early as 31 December 2019. This resulted in the completion of the bureaucratic and legal groundwork necessary for activating and empowering the Central Epidemic Command Center by the third week of January.5 Such initial response was implemented as the country prepared for holding its general elections held on 11 January. By 11 February, a wide array of measures regulating the flow of people from and to Mainland China was enacted.6 Crucially, Taiwan’s response throughout January 2020 stood in stark contrast with the WHO’s handling of the COVID-19 outbreak: as late as on 30 January, WHO Director-General Tedros Adhanom stated that other countries should not let the outbreak «interfere with international travel and trade».7

There is in fact a modicum of dark humour in Taiwan’s predicament during the earliest stages of the pandemic. The collapse of cross-Strait relations and the consequent exclusion of Taiwan from the WHO at the hands of Beijing (after it had joined with observer status during the presidency of Ma Ying-jeou 馬英九 between 2008 and 2016), together with plummeting perceptions of China in Taiwan, especially in the wake of the management of the Hong Kong protests,8 provided the Tsai administration the political capital and the necessary latitude to implement preventive measures which shielded the island from the first high tide of the pandemic. Other countries, including regional neighbours which have been relatively successful in containing the virus such as Japan, arguably squandered this initial opportunity out of a mix of cautiousness against the risk of encountering Beijing’s wrath,9 and an over-reliance on Chinese and WHO sources at the beginnings of the outbreak.

Such a timely reaction constituted only the first component of Taiwan’s success in the fight against the virus. The immediate cooperation between health and immigration state agencies, which through the integration of their respective data banks allowed the rapid identification and containment of cases, also played a key role.10 The bureaucratic and logistic effort to control the market of surgical masks, and the creation of an island-wide network of functioning testing centres, were other crucial components in the successful containment of the viral outbreak.11 The positive impact of government communication and digital governance by the Tsai administration decisively contributed to this success, but given the political implications of this endeavour, both at cross-Strait and international level, this dimension of Taipei’s response is fully explored in the next section of this essay.

3. Cross-Strait relations

The outbreak of the COVID-19 pandemic caused a further deterioration of already fraught cross-Strait relations. Political tensions related to the pandemic between the two sides immediately emerged in January, with the issue of the repatriation of Taiwanese residents in the first epicentre of the outbreak, Wuhan, as Chinese authorities refused to fully cooperate with their Taiwanese counterparts. After weeks of negotiations, two charter flights ultimately departed from the Hubei province capital respectively on 3 February and 10 March.12 During this early critical juncture, the question regarding Taiwan’s access to the WHO began to flare up. First, Taipei accused Beijing of providing false information on the unfolding of the viral outbreak on the island to the WHO.13 Successively, it contested Chinese accounts of a WHO online technical meeting on 11-12 February, which presented Taiwanese officials’ participation as a concession allowed by Beijing.14 As both sides successfully put the outbreak under control by March, tensions started to concentrate on Taiwan’s exclusion from the coming World Health Assembly (WHA) – the WHO decision-making body – scheduled in Geneva. In April, the Tsai administration launched an international public diplomacy campaign named «Taiwan Can Help». The campaign aimed at mustering international support for accessing the WHA and pressuring Beijing to give up its veto on Taiwan’s participation. Humanitarian assistance focusing on the gift of surgical masks and medical equipment was thus destined to 80 countries in order to publicize Taiwan’s «democratic model of excellence» to fight the pandemic through «transparency and honesty».15

Taipei’s strategic narratives of democratic technogovernance found a vocal platform in mainstream Western media,16 which had been caught between the success of China’s authoritarian model in fighting the virus and the dismissive, and at times even denialist, approach of the Trump administration in the management of the pandemic. President Tsai was at the helm of this operation, appearing on the cover of an April issue of Time Magazine and authoring an article touting Taiwan’s success.17 Beyond Tsai, two other members of the administration were embraced and lauded by Western media: exiting Vice-President Chen Chien-jen (陳建仁), and Minister without Portfolio Audrey Tang (唐鳳). Chen, an epidemiologist who had previously served as Minister of Health and head of the National Scientific Council, embodied a traditional strand of technocratic competence.18 Tang, a unique figure in Asian politics by virtue of being a transgender self-taught polymath, rose instead to international fame following their leadership in the reform of the digital ecology after the electoral campaign leading to the November 2018 elections. The electoral campaign was characterized by a notable up-tick in online disinformation, mostly targeted at Pan-Green candidates, which was successfully neutralized by Tang’s novel anti-disinformation digital approach.19 This new approach relies on big data analysis, real-time monitoring, and rapid-response teams making use of memes and other types of humorous communication to counter online disinformation and misinformation, together with timely ad hocamendments to existent legislation and the promulgation of an Anti-Infiltration Law in January 2020. Armed with these novel anti-disinformation techniques, Taiwan was then ready to withstand the first wave of «infodemic» at the onset of the COVID-19 pandemic, which the ROC Ministry of Justice traced back to Mainland China.20

Unsurprisingly, Beijing did not lift its veto in occasion of the WHA 2020 sessions held first in May and successively in November. Chinese authorities instead vehemently and consistently framed Taiwan’s diplomatic pro-activism as an attempt to «use the pandemic to plot for independence» (以疫谋独).21 This notwithstanding, the Tsai administration’s campaign was not a failure. First, it bolstered the expansion and solidification of international support from friendly partners at a juncture during which Taiwan’s grip over its so-called «diplomatic allies» has become increasingly tenuous.22 Public endorsements for Taiwan’s participation to the WHA in May came not only from the Trump administration via US State Secretary Mike Pompeo, but also from Japanese PM Shinzō Abe,23 and from both the Canadian and UK governments.24 A majority of members of the European Union Parliament (644/705) also joined these calls in the build-up to the other WHA session in November.25 More broadly, the contrast between Taiwan’s public health success and the exclusion from the WHO contributed to provide Taipei the moral high ground among Western audiences in regard to the issue of the island’s international isolation.26

Moreover, by promoting a «transparent» and «democratic» model in the struggle against COVID-19, the diplomatic campaign successfully exploited the growing backlash over China’s own attempt to politicize the pandemic among Western countries. Throughout the year in review, Beijing oscillated between ham-fisted attempts to shape foreign audiences’ perceptions (mainly via the sale of medical equipment masqueraded as gifts and through the use of propaganda on social media), and aggressive «wolf-warrior diplomacy» to fend off international criticism.27 In addition, increasing international scrutiny on the WHO further exposed the international organization, and in particular its leadership, to accusations of excessive deference to Beijing. Against the backdrop of previous lavish praises to the Chinese government for its initial response to the pandemic outbreak in January,28 both Director-General Tedros’ unsubstantiated accusations of a Taiwanese racist cyber-campaign against his persona,29 which were promptly echoed by Chinese authorities and state media,30 and Assistant Director-General Bruce Aylward’s clumsy attempt to deflect a question on Taiwan’s admission to the WHA by an RTHK journalist,31 contributed to damage the credibility of the organization among Western media and their audiences.32

China’s response to Taiwanese pro-activism in the first stage of the pandemic was not confined to diplomacy. After a first isolated occurrence in 2019, the People’s Liberation Army Air Force (PLAAF) operated 380 sorties within Taiwan’s Air Defence Identification Zone (ADIZ) on 91 days between 1 January 2020 and 30 November. These sorties saw repeated trespassing of the so-called «median line» (中線) of the Taiwan Strait – which had functioned for decades as an unofficial line of demarcation between Beijing and Taipei.33 The enforcement of a «punitive logic», highlighting Beijing’s displeasure for Taiwan’s diplomatic pro-activism and the continuous strengthening of its relation with the US is the most immediate explanation for the increase in PLAAF operations. The deployments of Chinese aircrafts in the Strait were generally clustered in periods of heated public diplomacy spats between the two sides, such as during the Taipei’s campaign to access the WHA session held in May, or in the immediate aftermath of Taiwanese diplomatic breakthroughs, such as the numerous high-profile contacts with American officials and delegations (as it will be showed in the next section of this essay). Furthermore, an examination of the chronology of Chinese operations suggest that the US Air Force’s own deployment in the airspace and waters in proximity of the ROC – designed as a response to the increasing presence of Chinese armed forces in the area – appeared to be a factor behind the tempo of PLAAF activities, thus creating a dangerous downward spiral for Taiwanese security.34Within this context, the further up-tick of PLA activities between the end of 2020 and early 2021 is arguably due to Beijing’s willingness to send a warning signal to the new Biden administration in Washington.

A second explanation of the logic of PLAAF operations, which integrates the former, sees the increasing deployment of PLA forces in the Strait from an instrumental perspective. From this standpoint, Chinese military pressure, beyond enhancing preparedness to a potential invasion of Taiwan in the near future, is designed to overstretch and wear down ROC armed forces and adjacent actors, such as the Coast Guard Administration (CGA). This strategy is implemented through «grey zones» approaches aimed at maximizing the asymmetry in defence budget between the two sides.35 The almost daily deployment of PLAAF aircrafts in the ROC-controlled ADIZ is the most manifest case in point, but the transits of the People’s Liberation Army Navy’s (PLAN) carrier groups Liaoning and Shandong across the Strait in April and in December also fall in this category.36 Extensive sand-dredging by Chinese civilian vessels in proximity of the ROC-controlled Matsu Islands’ waters since June, which highlights the role that state-controlled civilian actors play in Beijing’s grey zones approach, should also be included.37 Against this backdrop, the Tsai administration’s decision to raise by 10.2% the 2021 defence budget is evidence of the difficult economic choices that Taipei will have to face in the next years in light of ever increasing Chinese pressure.38

This explanation, in turn, paves the way for an understanding of Chinese military deployment across the Strait as «psychological warfare» (心理战), in line with its emergence since the Third Strait Crisis of 1995-1996 and its formalization as a component of the «Three Warfares» (三战) doctrine in the early 2000s.39 From this perspective, the operations conducted by PRC bureaucratic actors are construed to shape perceptions of Chinese domination and Taiwanese impotence among domestic, cross-Strait and international audiences. An episode such as the PLAAF pilot directly communicating to ROC Air Force personnel that «there is no median line» (没有海峡中线) across the Strait during an operation, which found a wide diffusion among Sinophone media,40 is a case in point, especially in light of President Tsai’s promise to forcefully expel Chinese aircrafts following the first trespassing of the median line in 2019.41 The same dynamic can be seen in the speculations surrounding a Chinese invasion of ROC-controlled Pratas Island (東沙).42 Rumours of a coming invasion of the uninhabited island, had emerged in light of the fact that most of PLAAF’s incursions occurred within the southwestern sector of Taiwan’s ADIZ – where Pratas is located – and were fuelled by the announcement that a Chinese joint PLAAF/PLAN large-scale drill in the island’s proximities was to be held in September.43 While these rumours were eventually denied by the same Chinese sources who first disseminated it,44 the whole affaire fits within a wider design aiming at intimidating the Tsai administration and undermining the Taiwanese public’s trust in the domestic institutions’ ability to guarantee Taiwan’s security.

Reflecting this «race-to-the-bottom» trend, the two sides refrained from introducing new policies for overcoming the deadlock of cross-Strait relations. The Chinese Communist Party’s (CCP) annual Taiwan Work Conference held in January – days after the general elections in Taiwan – confirmed the calcification of Beijing’s policies.45 PRC Prime Minister Li Keqiang (李克强) even broke with conventions in his report to the National People’s Congress at the yearly «Two Sessions» (两会) held in March, as he omitted the adjective «peaceful» (和平) in reference to China’s objective to achieve «reunification» (统一) with Taiwan, even though the standard formulation was eventually mentioned by other Chinese officials.46 Similarly, President Tsai remained highly critical of Beijing, publicly calling China a «threat» in September, as PLAAF operations across the Strait intensified.47 A partial exception to this trend was her annual ROC National Day speech on 10 October which stroke a more accommodating tone.48 The President not only reiterated previous calls to mend relations with Beijing, but also avoided to mention the 1992 Consensus. This is the contentious formulation endorsed (in different versions) by the CCP and the KMT and stating that both the Mainland and Taiwan belong to One China, which Tsai had refused to agree upon since coming to power.49 Yet, the significance of Tsai’s speech for a potential détente between the two sides should not be over-emphasised, in light of Beijing’s refusal to work with Tsai before an explicit acceptance of its interpretation of the Consensus. Rather than being a realistic overture, the speech aimed at projecting an image of Taipei as the «responsible stakeholder» in the cross-Strait relation to both domestic and external audiences.

Finally, the evolving situation in Hong Kong continued to be a further element of friction between the two sides. President Tsai criticized the new National Security Law introduced in the former British colony a week before its promulgation on 30 June, promising Taiwanese support for Hongkongers wishing to relocate to Taiwan.50 Taipei launched then a new organ under the Mainland Affairs Council, the Taiwan-Hong Kong Services and Exchanges Office (臺港服務交流辦公會) on 1 July.51 Neither the Tsai administration nor the Democratic Progressive Party (DPP, 民主進步黨) majority in the Legislative Yuan (LY), however, pushed for amendments of the Laws and Regulations Regarding Hong Kong and Macau Affairs, which do not include provisions for asylum seekers.52 Nonetheless, by the end of the year a record 10,813 Hong Kong Special Administrative Region (HKSAR) passport holders (compared to 5,858 in the previous year) relocated to Taiwan, mainly via investment visa schemes.53 Beyond customary warnings against DPP «black hands» (黑手) interferences via the PRC Taiwan Affairs Office of the State Council (TAO),54 Beijing responded by continuing to require the signature of a statement endorsing the «One China» principle to release visas to the personnel of the Taipei Economic and Cultural Office in Hong Kong, severely affecting its operations as the unofficial Taiwanese consulate in the city.55

4. Taiwan’s external relations

Beyond being a year marked by the beginning of a global pandemic, 2020 was also arguably the best year in US-Taiwan relations since the end of diplomatic relations in 1979. Conversely, US-China relations, reeling from the trade war which had resulted in the Phase One Trade Agreement on 15 January, experienced a freefall as Washington blamed the COVID-19 pandemic squarely on Beijing.56 The last year of the Trump administration started with an official statement from Secretary of State Mike Pompeo congratulating President Tsai for her re-election in January.57 The following month, Vice President-Elect William Lai Ching-te (賴清德) visited Washington in what was arguably the highest profile visit from a ROC official since the end of diplomatic relations in 1979. Lai met a cohort of pro-Taiwan Representatives and Senators as well as House Speaker Nancy Pelosi, visited the National Security Council, and joined an invitation-only event attended by the US President.58 President Trump himself signed the Taiwan Allies International Protection and Enhancement Initiative Act (TAIPEI) Act, originally introduced in the US Senate in 2019, in March. The act is designed to provide support for Taiwan’s remaining diplomatic allies, which China has lobbied to switch diplomatic recognition, and help expanding Taiwan’s access to international organizations.59 By signing the COVID-19 relief and government funding bill into law in December, Trump also turned into law the Taiwan Assurance Act first introduced into Congress in 2019.60 Washington also agreed to eight separate arms sales to Taipei throughout the year, including drones and multiple rocket and missile systems.61 On its part, Beijing responded for the first time with sanctions against major US defence companies selling armaments to Taiwan.62

Further evidence of the Trump administration’s support for Taipei came first from the decision to declassify two 1982 cables concerning the US’ stand on arms sale to Taiwan and the Reagan administration’s «Six Assurances» in August,63 and, successively, from the unexpected declassification of the Strategic Framework for the Indo-Pacific in January 2021. While the declassification of the cables was largely symbolical, given that their content was widely known, the publication of the Strategic Framework aimed at dissipating remaining concerns over the exiting administration’s commitment to Taiwan. Starting from the premise that «China will take increasingly assertive steps to compel unification with Taiwan», the document outlines a clear objective for Washington: to enable «Taiwan to develop an effective asymmetric defense strategy and capabilities that will help ensure its security … and ability to engage China on its own terms». More bluntly, the Strategic Framework also states the US will defend «the first-island-chain nations, including Taiwan».64

Indeed, 2020 marked a more profound strategic synergy between the two administrations. President Tsai fully embraced the Indo-Pacific narrative in the inaugural address of her second term in May, stating her administration’s intention to proactively contribute to «peace, stability and prosperity» in the region.65 This was followed by the announcement of the reopening of the Taiwan Economic and Cultural Office in the US unincorporated organized territory of Guam, one of the geopolitical pivots of the Indo-Pacific.66 The Trump administration provided an endorsement of Taiwan’s own narrative of democratic model for the management of the pandemic with the visit of US Health Secretary Alex Azar to Taipei in August. Azar’s became the highest-ranking visit of an American official to the island since 1979.67 Increasing contacts between US armed forces officials and ROC counterparts constituted another avenue to communicate Taiwan’s involvement in the construction and reproduction of an Indo-Pacific narrative, as well as the island’s contribution in the fight against the pandemic, and, obviously, closer relations between the two polities from a security perspective.68 Tsai herself then reiterated her administration’s alignment with the US in September, at a time of increasing military pressure from Beijing, by calling for an alliance of «like-minded partners with shared values» and for «a new future for the rules-based order in the Indo-Pacific» at the annual Ketagalan Forum held in Taipei.69

The excellent state of the relation, in turn, led the Tsai administration to take concrete steps to remove one of the major obstacles in the signature of a trade agreement with Washington: the ban on US pork containing ractopamine and beef from cattle aged over 30 months. After the ROC President expressed her administration’s plans in August, the DPP majority in the LY approved the removal of the ban in December.70 The Tsai administration spent some of the political capital gained in the efficient management of the COVID-19 pandemic to push a deeply unpopular measure.71 The economic dimension of US-Taiwan relations experienced then a new momentum in the second half of the year. State Department Under-Secretary Keith Krach led a US business delegation in September;72 while the interministerial U.S.-Taiwan Economic Prosperity Partnership Dialogue was launched in Washington, D.C. in November.73 In addition, Washington and Taipei’s respective representative offices, AIT and TECRO, signed a Framework to Strengthen Infrastructure Finance and Market Building Cooperation in September and a Science and Technology Agreement in December.74 The ban lift, however, did not reach its main objective, as the US Trade Representative of the Trump administration, Robert Lightizer, continued to refuse to open talks on trade agreements without a full removal of trade barriers for US meat products.75

Even before the Biden administration was seated on 21 January 2021, American foreign policy environments and punditry did not expect a fundamental change of course in Washington’s China policy.76 The solid track of bipartisan consensus for bills concerning Taiwan in both the House of Representatives and the Senate during the Trump administration, as well as the invitation of Taiwan Representative to the US Hsiao Bi-khim (蕭美琴) to the Biden’s inauguration ceremony, and the first pronouncements of his administration on Taiwan delivered in January 2021, appeared to confirm such expectations.77

Taiwan’s relations with its other major partner, Japan, were also characterized by a leadership transition, as Shinzō Abe resigned from his position as Prime Minister in September 2020 after eight years in power and was succeeded by his former chief cabinet secretary, Yoshihide Suga. During the final leg of the Abe cabinet, Tokyo did not fail to provide support to the Tsai administration even within the rigid constraints of its One China policy. Minister of Foreign Affairs Toshimitsu Motegi sent a congratulatory message for Tsai’s re-election in January;78 and Tokyo issued an official statement in support of Taiwan’s participation in the WHA – as previously mentioned in this essay – while former Prime Minister Yoshirō Mori led a high-profile visit on the occasion of the funeral of the first democratically elected President of the ROC, Lee Teng-hui (李登輝) in August.79 In the first months of the new administration, the Suga cabinet continued the policy of cautious support that characterized his predecessor.80 Both the appointment of Abe’s brother Nobuzaku Kishi – a figure considered particularly close to Taiwan in Japanese politics – as Ministry of Defence in the new cabinet,81 and the release of the MOFA Diplomatic Bluebook in October, which defined Taiwan as an «extremely crucial partner and an important friend»,82 confirmed a solid rapport with Taipei. A worrying development for Taipei has been however the lack of progress over Taiwan’s request to join the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) free trade agreement (FTA). The most immediate reason behind Tokyo’s resistance to unlock the negotiations is Taipei’s continuing ban on the import of food products from areas affected by the 2011 Fukushima Daiichi nuclear disaster. The economic dimension of Sino-Japanese relations and Beijing’s explicit interest in joining the CPTPP arguably also played a role in the protracted negotiations.83 Beijing’s access would spell the end of Taipei’s hopes to join the regional mega-FTA.

Mainly due to China’s assertiveness, India acquired a growing relevance in Taiwan’s external relations throughout 2020. In May the PLA began a series of co-ordinated incursions within India-controlled areas along the contested Tibet-Ladakh and Tibet-Sikkim borders, which eventually resulted into a protracted series of deadly skirmishes between the two countries’ ground forces.84 By fall, as Indian media and nationalist constituencies vehemently endorsed closer relations with Taiwan as retribution against China,85 a Bloomberg report claimed that the Modi government had been considering a potential trade agreement with Taiwan.86 The absence of successive updates on this issue suggests that this was in fact a leak aimed at Beijing during a critical juncture in the bilateral negotiations for disengagement.87 However, even though a breakthrough trade agreement between New Delhi and Taipei appears as a remote possibility in light of the potential Chinese reaction and of the necessity to scale down tensions after a successful disengagement, India’s increasing attention to Taiwan does constitute a meaningful development. A tangible sign of this new course was the Modi government’s decision to allow Taiwanese Apple assemblers to invest in the country, which appears to be part of India’s attempt to delink its economy from China-dependent supply chains. 88 In the broader geo-economic context of the Indo-Pacific, this strategy dovetails with the Tsai administration’s own plans of economic decoupling from China, which are organized around the New Southbound Policy (NSP) agenda, targeting South Asia, South-East Asia, and Oceania. Moreover, this geo-economic convergence has the potential to provide a lifeline during a year in which the NSP – an initiative that puts a premium on entrepreneurial activities, tourism, training, and education exchanges – stagnated due to the pandemic.89

Taiwan also obtained small but meaningful diplomatic successes in the context of Beijing’s global pressure, especially in its relations with the European Union (EU) and its member states. The most important, as previously mentioned, was the EU Parliament’s support for Taiwan’s access to the WHA. Another sign of progress in relations with Brussels was the launching of the first EU-Taiwan Investment Forum in September in Taipei.90 Outside of the EU framework, the most high-profile development was the seven-day visit delegation from Czechia led by Senate President Miloš Vystrčil in September,91 which followed Prague mayor Zdeněk Hřib decision to establish sister-city ties to Taipei in 2019. The visit occurred in the midst of a nationwide backlash against perceived Chinese influence in the country under the tenure of the populist president Miloš Zeman.92 The visit also impacted the course of EU-China relations at a critical juncture. In the midst of a diplomatic trip to Europe to repair relations strained by Chinese aggressive politicization of the COVID-19 pandemic, Chinese Foreign Minister Wang Yi’s (王毅) threats that Vystrčil would «pay a heavy price» were met with rare stern rebukes from German and French diplomacy.93 Other minor successes for the Tsai administration were the opening of a new representative centre in the French city of Aix-en-Provence, and the name change of the Dutch representative office in Taiwan from Netherlands Trade and Investment Office to Netherlands Office Taipei.94A counterpoint to Taipei’s progress in relations with EU member states was the case of Italy, the only country in the bloc that applied a «One China» blanket travel ban to Mainland China, Hong Kong, Macau, and Taiwan at the onset of the pandemic in February, to which the Tsai administration replied with a ban on the import of pork products from the country.95

Taiwan’s attempts to escape diplomatic isolation also took an unexpected turn. The island and the self-declared state of Somaliland, located within the internationally recognized borders of Somalia, announced the establishment of representative offices in both polities in July.96 Chinese reactions, after having failed to convince the local authorities to accept a standard «package» of economic incentives to avoid establishing relations with Taipei,97 were expectedly harsh. Foreign Ministry spokesman Zhao Lijian (赵立坚) warned of a «bitter fruit» to «swallow» for whoever opposed Beijing’s One China principle.98

5. Domestic economics and politics

Major economic indicators for 2020 show the positive effects of the successful management of the pandemic on the Taiwanese economy. Taiwan’s GDP growth stood at 2.98%,99 while industrial production grew 9.9%.100 In line with these results, total exports reached a historically high US$ 345 bn total, recording a 4.9% growth compared to 2019, driven by the electronics manufacturing sector that counted for 39.3% of all exports. Imports, instead, totalled US$ 286 bn, growing 0.3%. As a result, Taiwan’s trade balance recorded a US$ 58.7 bn surplus, leading to a plus 35.1% compared to the previous year.101 China’s own rapid economic recovery from the pandemic played a fundamental role in Taiwan’s recovery, with exports to the Mainland and HKSAR recording a 14.6% growth that amounted to US$ 151.4 bn, counting for 43.9% of total exports. Similarly, imports from the two PRC areas also raised by 10.8%, amounting to US$ 64.7 bn. By comparison, exports to the US counted for roughly a third of those to China (US$ 50.5 bn with a 9.3% growth), while imports shrank 6.4%, amounting to US$ 32.6 bn.102 The strength of the domestic economy during the pandemic-induced global recession was also evident from the available data on the labour force, which saw the unemployment rate remaining virtually unvaried at 3.68%.103 The pandemic had also a heavy impact on the flux of foreign direct investments (FDI) to Taiwan, which saw a 18.3% contraction compared to the previous year, totalling US$ 9.1 bn. Within this overall trend, FDI from Mainland China recorded a 29.9% increase compared to the extremely low baseline of 2019, amounting to US$ 126 million.104 FDI from the US shrank instead 27.7%, standing at US$ 261 million.105

The recession, however, did not stop US Big Tech’s investments to Taiwan, continuing an important development that first emerged in the context of the Sino-American trade war. Google and Facebook chose the island as the ultimate destination of an underwater data cable connecting the US to Asia, after a US Justice Department recommendation against the original destination, Hong Kong.106Moreover, both the Mountain View company and Microsoft decided to open new data centres in the island by the end of the year.107 Coupling American investment was the continuing reshoring of Taiwanese business back to the island, with electronics manufacturing companies such as Quanta, Innolux, and Unimicron following industry heavyweight Pegatron with new investments. Overall, major Taiwanese companies have invested US$ 38 bn back home since the introduction of ad hoc measures for reshoring by the Tsai administration in 2019.108 The post-pandemic reality of the global economy, however, suggests that state-led attempts to diminish Taiwan’s economic dependency from the Chinese market remain extremely difficult, as the main engine of Taiwanese economic recovery, the impressive gains of Taiwanese chipmakers, relied on China’s own rapid recovery and its demand.109

Even though effective public health management created the context for a successful economic recovery, this would have not been possible without the economic policy of the Tsai administration. In February, the Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens, introduced by the Ministry of Health and Welfare, provided a US$ 2.1 bn fund to withstand the immediate impact of the pandemic. An additional package amounting to US$ 5.3 bn was then added through an amendment of the Special Act in April,110 and a further US$ 7.1 bn were allocated in July through a special budget.111 The three packages provided financial aid for both businesses and workers; subsidies for employees who had been furloughed; unemployment payments for those who had lost their jobs; and tax breaks for businesses. In addition, the Committee of the National Financial Stabilization Fund decided to deploy in March its US$ 1.6 bn war chest to contrast market volatility, operating in the Taiwan Stock Exchange until October.112

Polls by the authoritative Election Study Center of the National Chengchi University conducted at the end of 2020 reflect the widespread appreciation of the Taiwanese electorate for the Tsai administration. They also confirmed an ongoing trend favouring localist identities and independence or independence-leaning positions among the public. 64.3% identify as «Taiwanese», an all-time high, while 29.9% identify as «both Chinese and Taiwanese», and 2.6% as «Chinese» – the last two being the lowest percentages on record.113 Similarly, 25.8% of Taiwanese support a «maintain status quo, move toward independence» (another all-time high), while the position «maintain status quo, move toward unification» stood at 6.6%, the second lowest polling ever. Support for immediate unification also polled at a historically low 1%. More moderate positions, namely «maintain status quo, decide at later date» and «maintain status quo indefinitely» polled respectively at 28.8% and 25.8%.114 Party preferences largely reflected these trends, with appreciation for the DPP reaching an all-time high 34%, and the KMT recording its second worst performance on record at 17%. Taipei mayor Ko Wen-je’s (柯文哲) Taiwan People’s Party (台灣民眾黨) at 4.9%, overcame the pro-independence New Power Party (時代力量) as the third political force in the country.115 MAC polls commissioned to the Election Study Center released in November also showed that 86.7% of Taiwanese oppose the «one country, two systems» (一国两制) framework, and that 74.4% oppose the 1992 Consensus.116

With the DPP in a dominant position, the KMT struggled to design a new path to come back to power after having briefly succumbed to the temptation of populist politics following the meteoric rise of Kaohsiung mayor Han Kuo-yu (韓國瑜) as Presidential candidate in 2019. In the aftermath of the electoral defeat, the party appeared to be on the cusp of a fundamental policy shift in its electoral platform, eventually to revert to a stagnating and unimaginative approach to cross-Strait relations by the end of the year. Previously, between 2017 and 2019, the party, under the chairpersonship of Wu Den-yih (吳敦義) had backtracked from the short-lived pro-unification turn took under the leadership of Hung Hsiu-Chu (洪秀柱). Wu aimed at rallying the party back to the cross-Strait policy of the Ma era, centred on the so-called «One China, respective interpretations» (一中各表) understanding of the 1992 Consensus. This formulation was fundamentally a rhetorical device allowing the party to pursue a policy of increasing socio-economic integration with the PRC while presenting itself as a defender of ROC statehood.117

Even though Wu’s attempt had received a frosty response from Beijing,118 a persistent degree of political ambiguity and misinformation surrounding the Consensus among the Taiwanese electorate allowed the party to side-line thorny questions over its capacity to guarantee the current political status-quo.119 Initially, the strategy appeared successful, in light of the victory in the 2018 local elections and of the short-lived popularity of Han Kuo-yu. The major speech delivered by the Chinese leader Xi Jinping (习近平) on Taiwan in January 2019, which implicitly equated the 1992 Consensus to a roadmap for eventual reunification under «one country, two systems», frayed however the foundations of the KMT’s electoral strategy.120 The Hong Kong protests that marked the second half of 2019 and their management by both the HKSAR government and the PRC central government resulted into an even firmer refusal of Beijing’s reunification agenda, leaving virtually no room for the party’s delicate balancing act on cross-Strait relations. With the contradictions of its China policy laid bare, Han’s electoral run rapidly derailed.

After the route in the elections, in which the KMT also failed at denying a new parliamentary majority to the DPP, the party elected the 48-year old LY Minority Leader Johnny Chiang Chi-chen (江啟臣) as its Chairperson in March.121 Although even party sources had claimed, just days before the internal contest, that Chiang was ready to abandon the 1992 Consensus, the new Chairperson opted instead for a collegial approach by establishing a Party Reform Committee, itself featuring a Cross-Strait Discussion Group.122 While by June the party appeared close to discard the Consensus and explore alternatives,123 it ultimately backtracked in September, restating instead its support for the «One China, respective interpretations» version of the 1992 Consensus as the cornerstone of its China policy.124

Tensions with Beijing, which already in March had avoided to send the customary message of congratulations by the General Secretary of the CCP, remained however high even after the party’s re-affirmation of the Consensus. For instance, in September, the KMT withdrew from the annual Straits Forum (海峡论坛), held in Xiamen for the first time, after a China Central Television (CCTV) programme described the expected visit of the leader of the party delegation, former LY Speaker Wang Jin-pyng (王金平), as aimed to «sue for peace» (求和).125 Arguably, the worsening of inter-party relations since Chiang came to power is evidence that the CCP expects more than a mere return to Ma-era policies from the KMT.

The party’s annus horribilis also saw Han Kuo-yu being recalled from his position as Kaohsiung mayor in June, with exiting ROC Vice-Prime Minister Chen Chi-mai (陳其邁) overwhelmingly winning the mayoral by-election for the DPP in August.126 Han’s erratic behaviour and manifest incompetence as a mayor, coupled with his decision to focus on national politics only months after having surprisingly won the election in a historical DPP stronghold, were the driving factors behind the recall. Party tribulations, however, did not stop KMT representatives in Taiwanese institutions from showing a flair for combative politics. In November, KMT members of the LY protested against the lifting of the ban on pork and beef imports from the US by throwing pig guts in the legislative chamber.127Behind the bizarro staging of the protest, there was a shrewd political calculation of taking advantage of the most unpopular policy pushed by the Tsai administration in 2020. By the end of the year, KMT LY-member Lim Ui-tsiu’s (林為洲) request to collect signatures for a referendum on the issue to be held in August 2021 was approved by the Central Election Commission.128

6. Conclusions

Taiwan’s response to the outbreak of the COVID-19 pandemic during the year in review showed the many strengths of its society and democratic institutions, thanks to the combination of competent governance and social cohesion. Yet, at the same time, the international politics of the COVID-19 pandemic underscored the fragility of the island’s position in the regional chessboard of the Asia-Pacific, as Sino-American tensions morphed into a full-fledged rivalry between superpowers. This predicament accelerated then major trends that first emerged with the electoral victory of Tsai Ing-wen and her DPP in the 2016 general and that successively became fully entrenched in 2019, following China’s management of the Hong Kong protests and their impact on Taiwanese perceptions of Beijing. China further intensified its full-spectrum pressure, in particular via a calculated escalation in the deployment of military forces surrounding the island as a source of coercion. Taiwanese, in turn, responded to Beijing’s assertiveness with a stronger backlash that consolidated the DPP’s dominant position in the domestic political landscape and put the KMT in front of a political conundrum that further hindered its electoral viability. Finally, Taiwan-US relations continued to strengthen across the diplomatic (even in the absence of official relations), military, and economic domains, as a by-product of the two sides’ own worsening relations with China, thus contributing to the deterioration of political and military stability across the Strait.

ISSN 2385-2526