The year in review was marked by a year-long electoral campaign for the presidential and legislative elections eventually held on 13 January 2024. The candidate of the Democratic Progressive Party, Vice-President Lai Ching-te, won the presidential race, beating the Kuomintang candidate Hou Yu-ih and the Taiwan People’s Party Ko Wen-je. Yet Lai’s party lost the majority in Taiwan’s unicameral parliament, the Legislative Yuan, for the first time since 2016, whereas the Kuomintang obtained a majority of seats without, however, reaching an absolute majority itself. The attempts by both the Kuomintang and Beijing to frame the elections as a choice between «war and peace», portraying the DPP as solely responsible for the ongoing tensions in the Taiwan Strait, were not successful. Similarly, Beijing’s own pressure playbook once again failed to shape a Taiwanese electoral contest in its favour. Yet the DPP’s dwindling electoral performance, reflecting an inability to address structural issues of the island’s economy, revealed inherent weaknesses in its own playbook to remain in power – especially as Ko’s Taiwan People’s Party searches for votes in similar constituencies. Outside of the domestic arena, Lai has promised continuity with the Tsai administration, which has continued to enjoy incremental support from Western and regional liberal democracies. Sceptical voices over the need to support Taiwan vis-à-vis China from both America and the European Union, as well as the slow pace in the development of trade relations, have however sown doubts in the solidity of support for Taiwan.

Keywords – Taiwan; China; Cross-Strait relations.

1. Introduction

This essay explores the developments that occurred in the Republic of China (Taiwan) – henceforth ROC – in the fields of cross-Strait relations, international politics, domestic economy, and politics in 2023, as well as the results of the general election held on 13 January 2024. The first part of the essay provides a snapshot of the electoral results. The second examines the unfolding of the electoral campaign with a focus on the presidential elections. The third covers the evolution of the triangular relation between Taipei, Beijing, and Washington. The fourth assesses developments in Taiwan’s external relations with European and Indo-Pacific actors. The fifth provides a snapshot of the major economic indicators for the year under examination. Finally, the conclusion sums up the findings of this article.

2. The results of the 2024 elections

On 13 December 2023, Taiwanese voters elected the new president of the Republic of China (ROC) and the new members of the unicameral parliament, the Legislative Yuan (LY). William Lai Ching-te (賴清德), vice-president during Tsai Ing-wen’s (蔡英文) second term and candidate of the Democratic Progressive Party (民主進步黨, DPP), won the presidential election with 5,586,019 votes, 40% of the total. Lai recorded 2,584,212 fewer votes than Tsai in 2020. In contrast with Lai, Tsai had also obtained a 57% share of the popular vote in the previous electoral round. Lai won a contested three-way presidential race against the Kuomintang’s (國民黨, KMT) candidate, the mayor of New Taipei, Hou Yu-ih (侯友宜), and the candidate of the Taiwan People’s Party (台灣民眾黨, TPP), the former mayor of Taipei, Ko Wen-je (柯文哲). Hou obtained 4,671,021 votes, amounting to 33.4%. Ko instead came third, with 3,690,466 votes, amounting to 26.4% [CEC 2024a]. Lai’s victory meant that a political party in Taiwan was able to elect its presidential candidate for the third consecutive time since the completion of the democratization process on the island in 1996.

Despite the victory of its candidate in the presidential election, the DPP failed to win a parliamentary majority for the first time since 2016. As in previous rounds, the legislative election was contested with a mixed system. Taiwanese voters elected 73 district legislators with the first-past-the-post system, 34 legislators-at-large with a party-list proportional system, and six legislators for indigenous constituencies with a single non-transferable system [Huang 2017]. The KMT resulted as the largest party in the LY, obtaining 52 of 113 available seats, in contrast to the 38 seats won in 2020. In detail, it elected 39 district legislators, accounting for 39.96% of the total share (5,401,933 votes). It also elected 13 legislators-at-large, accounting in this case for 34.58% of the total share (4,764,293) [CEC 2024b]. The 2 LY legislators, elected as independent members, a district legislator and an indigenous-constituency legislator, also caucused with the KMT, constituting a 54-seat-strong bloc, which, however, was still 3 seats short of the 57-seat threshold for a parliamentary majority. On its part, the DPP, while still obtaining the highest number of votes for a single party, elected only 51 legislators, against the 61 elected in 2020. Forty-eight were elected as district legislators (6,095,276 votes, 45.09%), while the other 13 were elected as legislators-at-large (4,981,060 votes, 36.16%) [CEC 2024b]. The TPP resulted as the third force also in the legislative election, winning 8 seats – three more than in 2020 – all of them being legislators-at-large (3,040,334 votes, 22.07%). It failed, however, to win any seat among the district legislators, gaining only 403,357 votes (2.98% of the total share) [CEC 2024b].

The election’s result suggested that the TPP would then force either the KMT or the DPP to reach a compromise to elect the new LY president (a position equivalent to that of the «speaker» in the political systems of the Anglosphere). Yet, the KMT was ultimately able to elect its 2020 presidential candidate, former Kaohsiung mayor, and deep-blue firebrand Han Kuo-yu (韓國瑜).1 TPP legislators abstained from the second round of voting (in which only a plurality of votes, rather than the majority, was necessary) after having pro forma supported the candidature of their representative Huang Shan-shan (黃珊珊) [Hsiao 2024, 1 February]. The KMT’s control of the LY presidency, tasked with «presiding and overseeing the meetings of the Legislative Yuan and of the various legislative committees» [L&RD], was expected to impact the DPP’s legislative agenda for the next four years. The DPP’s defeat in the legislative election, however, will not result in a «co-habitation» scenario, as in the case of other semi-presidential systems like the French Republic, as the nomination of a premier (officially the «President of the Executive Yuan») is a prerogative of the president of the Republic [Fell 2018: 54-61].

3. A year-long countdown to the elections

The ruling DPP entered 2023 in a difficult position, primarily because of the state of the Taiwanese economy. After an ebullient 2021, Taiwan’s economy entered troubled waters in 2022. Rising energy prices and inflationary trends driven by the war in Ukraine and the sputtering recovery of the global economy after the COVID-19 pandemic exacerbated the long-unsolved structural issues of the Taiwanese economy. They include low wages, high living costs, with particularly pressing social issues stemming from scarce access to the real estate market for youth and labourers, insufficient public transportation infrastructure, lingering inequalities in the education system, and inadequate measures for the social care of infants and the elderly [Yu 2023, 20 December]. The public’s understandable focus on economic issues, in fact, shifted the electoral contest to a terrain favourable to the two leading opposition parties, the KMT and the TPP. This trend was already visible in the trouncing the DPP experienced in the November 2022 local elections, in which it was soundly beaten by the KMT.

Similar concerns among the Taiwanese electorate had emerged already in the lead-up to the 2020 elections. Against the backdrop of Chinese multi-domain pressure targeting Taiwan since Tsai’s victory in 2016, the KMT had been initially successful in portraying the DPP as ultimately responsible for increasing tensions in the Strait and the negative repercussions suffered by the Taiwanese economy, enjoying an early lead in the polls prior to the summer of 2019. It had done so by exploiting the public’s uncertainty over the actual nature of the so-called «1992 Consensus». This is a formulation endorsed by both the CCP and the KMT, which states that both the Mainland and Taiwan belong to «One China», even though the KMT’s own version states that this «One China» is the ROC, not the PRC. The 1992 Consensus regulated relations between Beijing and Taipei during the Ma Ying-jeou presidency, which the DPP has refused to abide by since it came back to power [Wang 2019], while glossing over Beijing’s own continuing, subtle shifting of the content of the «consensus» itself [Insisa 2021]. However, the candidature of a political figure catering to the most pro-China, most conservative constituencies of the KMT electorate such as Han Kuo-yu, and, above all, the Taiwanese public’s revulsion for Beijing’s repression of the 2019-20 Hong Kong protests [Chong et al. 2023], paved the way for Tsai’s triumphant election and for the DPP’s continuing control of the LY majority in 2020. Furthermore, these trends certified the diminished stature of the KMT in the presidential elections, a context in which security concerns about China more profoundly shape electors’ choices. In this situation, the KMT was unable to leverage its local networks of patronage, which continue to make it competitive in legislative and county-level elections [Fell 2018: 132-149].

Scepticism toward Beijing and limited outreach of the KMT among an electorate for whom historical, socio-cultural, and political ties with China have scarce salience remained established trends of the Taiwanese electoral landscape throughout 2023 and at the ballot in January 2024 [Lee et al. 2023]. What changed, however, was growing disillusionment among the electorate that enabled Tsai’s and the DPP’s victories in 2016 and 2020, for the DPP’s inability to address structural issues that plagues Taiwan’s socio-economic condition, in particular housing and low wages. This discontent was effectively captured by Ko Wen-je and his electoral vehicle, the TPP, a personalist populist party.2 Ko had decided to sit out the presidential elections and to only field candidates for the legislative elections in 2020. He decided however to run in 2023, officially launching his campaign as the TPP presidential candidate on 17 May. As early as 2019, Academia Sinica scholar Lin Thunghong had highlighted how Ko had been capable of mobilizing the «losers of globalization» within Taiwanese society, namely small business owners and local youth who have been the most affected by «growing social inequality and fewer economic opportunities» [Klein et al. 2022].

Thus, the DPP continued to emphasise Beijing’s intentions to alter the status quo and the threat that its plans pose to the island’s autonomy, attempting to shift the focus from the domestic economy to security. On its part, the KMT largely adopted the same playbook as in 2020, presenting itself as the only party capable of both avoiding war and relaunching the local economy because of its close relations with Beijing based on the «1992 Consensus». Differently put, the KMT essentially promised to turn back the clock of cross-Strait relations to the second Ma term (2008-2012) [Insisa 2021], a period in which Taiwan appeared to be able to enjoy the fruits of amicable relations with China without having to commit to unification. Ko’s message did not stray far from that of the KMT, but with a crucial difference. While the KMT’s cross-Strait policy suffered from the self-imposed straightjackets of the 1992 Consensus and the defence of Chinese nationalism, Ko could do away with such unpopular constructs. He promised instead apparently common-sense but ultimately vacuous solutions to the dilemma of managing relations with the Xi administration [Mazzetta 2023]. This approach allowed focusing on the economy and on the plight of low-wage workers and especially urban youth, «betrayed» by the DPP technocratic rule but unwilling to vote for a gerontocratic, pro-China KMT.

The path towards the nomination was relatively straightforward for both Lai and Hou. Following President Tsai’s resignation from the party chairpersonship after the DPP defeat in the nine-in-one local elections in November 2022, Lai was elected the new Chairperson of the party on 15 January, a clear signal that he would run as the DPP presidential candidate a year later. In his first speech as chairperson, Lai immediately emphasized how, under his guidance, the party would continue to follow the so-called «four adherences» (四個堅持) outlined by President Tsai in 2021 – a formula aimed at preserving the current political status quo across the Strait [DPP 2023]. In other words, Lai promised that his presidency would continue to follow the path set by Tsai in handling cross-Strait relations, thus refusing to enter any negotiation aiming to subordinate Taiwan to the People’s Republic of China (PRC), but at the same time implying that Taipei would not attempt to move towards independence.

Lai’s intention to guarantee continuity with the past was signalled to domestic constituencies as well as to Chinese, and Western (especially American) decision-makers. More specifically, Lai’s first speech was an attempt to pre-emptively defang accusations from political adversaries in Taiwan and to assuage the potential doubts of foreign countries, primarily the United States, that had deepened relations with Taipei under Tsai, given his explicit pro-independence positions in the past. Prior to his rise to the higher echelons of Taiwanese politics, Lai had stated to be a «political worker for Taiwan independence» [Insisa 2018:137]. None of these moves, however, changed Beijing’s public perception of Lai as a de facto pro-independence candidate, as showed by its propaganda system [Wang 2023, 1 May].

Eventually, Lai was announced as the presidential candidate on 12 April. A first challenge for his campaign emerged as early as June when a former DPP staffer, Chen Chien-jou (陳汘瑈), accused a division head of having silenced her attempt to report a case of sexual misconduct within the party, leading to a wave of similar allegations by other party members. The DPP majority in the LY swiftly responded to this major challenge with a series of amendments to the sexual harassment prevention laws in order to control the damage [Wang J. 2023, 16 August].

The KMT waited instead until 17 May to formalize the nomination of Hou Yu-ih as its presidential candidate, even though he had been the front-runner since autumn 2022. Earlier in March, the party Chairman Eric Chu Li-lun (朱立倫) announced that, in an attempt to select a candidate with broad electoral appeal, the KMT had foregone the presidential primaries [Shih & Chin 2023, 23 March]. This rather paradoxical decision was due to the fact that, in the past, presidential primaries had selected two profoundly inadequate candidates with scarce appeal outside the most «deep-blue» constituencies: Hung Hsiu-chu (洪秀柱) in 2015 and Han Kuo-yu in 2019. In the months prior to the nomination, the KMT’s shuttle party diplomacy to China was especially active. Vice Chairman Andrew Hsia Li-yan (夏立言) visited China in February, meeting with the new Director of the Taiwan Affairs Office (TAO) of the State Council, Song Tao (宋涛). During the meeting, Hsia and Song reaffirmed the cooperation between the two parties based on the common political foundation of the «1992 Consensus» [TAO 2023a]. A few days before Hou’s nomination, the other KMT vice chairman, Sean Lian Sheng-wen (連勝文), also met with Song, once again reaffirming the «consensus» as the linchpin in the relation between Beijing and the KMT [TAO 2023b]. Hou himself expressed his support for the «consensus» on 3 July [Xinhua 2023, 3 July]. Simply put, after the timid attempts by former-Party Chairman Johnny Chiang Chi-chen (江啟臣) to steer the KMT beyond a conceptualization of cross-Strait relations increasingly unappealing to the Taiwanese public in 2020 [Hille 2020, 6 March], the KMT resorted to turning back the clock and proposing the same message that drove it to electoral defeat in 2016 and 2020. In doing this, the party ignored in particular the relatively subtle but meaningful shifts in Beijing’s interpretation of the 1992 Consensus since the Ma years – from a baseline to manage relations with Taipei to a precondition for maintaining economic ties to a commitment to unification under the «one country, two systems» framework [Insisa 2021].

By the end of August, the electoral race was shaken up by Foxconn tycoon Terry Gou Tai-ming’s (郭台銘) announcement on 28 August that he would launch a new presidential bid as an independent candidate. Gou had already launched a presidential bid for the 2020 elections, being defeated by Han Kuo-yu in the KMT presidential primaries. While Gou never polled high enough to be competitive, his announcement posed a particular challenge for Hou, as both candidates would arguably compete for the same conservative, Chinese nationalist constituencies. The first TVBS poll conducted after Gou’s announcement saw Lai at 30%, Hou at 19%, Ko at 23%, and Gou at 14% [‘TVBS’ 2023a].

Between July and August, Lai and Hou took similar steps in engaging with the US. On 4 July, an opinion column under Lai’s name appeared in The Wall Street Journal. The opinion piece outlined a «four-pillar plan» for maintaining «peace» in the Strait: shoring up deterrence, improving economic security by diversifying supply chains away from China, fostering economic and political relations with other democratic countries, and managing cross-Strait relations with «pragmatism and consistency» [Lai 2023, 4 July]. An article under Hou’s name appeared instead on the web edition of the magazine Foreign Affairs. The article outlined a «three-D» strategy consisting of «deterrence, dialogue, and de-escalation», reiterating support for the KMT’s understanding of the 1992 Consensus and inflating the risk of a push for Taiwan independence by the DPP, as well as accusing the ruling party of being responsible for current cross-Strait tensions and for a «precipitous and impractical» energy transition [Hou 2023, 18 September]. Both Lai and Hou also visited the US prior to the elections. Lai arrived in the country in August in his capacity as vice president for a stopover visit on the way to one of the ROC’s few remaining diplomatic allies, Paraguay. In Washington, he publicly met personnel of the American Institute in Taiwan, the US’ «unofficial embassy» in the island [Hamacher & Lee 2023, 17 August]. Hou visited the US in September, four years after his predecessor as KMT presidential candidate, Han Kuo-yu, had made the path-breaking decision to renounce the traditional pre-electoral visit to the US [Hsu et al. 2023, 20 September].

As the electoral campaign entered its most heated phase, former President Ma Ying-jeou (馬英九) took the central stage to engineer a DPP defeat by uniting the other candidates. Ma’s attempt to directly shape the public debate was evident on 2 October when he announced that he would boycott the annual ceremony for the ROC National Day, commonly known as the «double-ten» event, over the Tsai administration’s decision to use the English title «Taiwan National Day» for the new logo without mention of the ROC [Chung 2023, 2 October]. The former President was eventually joined in his boycott by the KMT presidential candidate. This was a two-pronged manoeuvre, on the one hand pressuring deep-blue independent candidate Terry Gou to drop the race, and on the other to convince Ko, the TPP candidate, to join the KMT in a «blue-white» electoral alliance. The negotiations monopolized political conversations in Taiwan for much of October and November. An agreement between the parties repeatedly seemed on the verge of being finalized, with the two parties having agreed on a complex roadmap to establish who would run as president and who would run as vice president based on the evaluation of multiple polls [Kuo & Kuan-ting 2023]. The negotiations, however, ultimately collapsed on 23 November, the day before the deadline to register candidatures, after a farcical meeting broadcasted live from the Grand Hyatt hotel in Taipei which involved former President Ma Ying-jeou, KMT Chairman Eric Chu, and the three candidates – Hou, Ko, and Gou [Hou & Creery 2023, 23 November].

The electoral alliance’s collapse was particularly damaging for Ko. His trajectory from green-leaning independent candidate towards positions close to the blue camp had been years in the making. Yet, moving towards an agreement with the KMT fleshed out the ideological void behind his personalist populist political project [Shi 2023, 15 November]. The anti-DPP combine failed as Ko realized that the roadmap for nomination agreed on 15 November favoured Hou and that he would run as vice president of a KMT candidate [Roctus 2023, 4 December]. Ko’s chances to win the 2024 presidential elections, already dim, petered out after the breakdown of negotiations with the KMT, leading him, a month before voting, to state «in my heart I am deep green» and to vow to continue the approach of the Tsai administration on national defence issues, in an attempt to recapture votes from green constituencies [‘Ko Wen-je’ 2023]. The breakdown of the opposition talks was also followed by the announcement of Gou’s withdrawal from the presidential race. Noticeably, rumours about this choice had been swirling since October, when Chinese authorities had started investigations for tax and land irregularities by his company Foxconn in Mainland China [Lee & Blanchard 2023, 23 October].

These developments effectively turned the contest for the presidency into a two-way race between Lai and Hou. As the deadline approached and the anti-green alliance collapsed, the DPP and the KMT made mirroring choices for their respective vice presidential candidates. The DPP chose the de facto ambassador of Taiwan in the US, Hsiao Bi-khim (蕭美琴), a popular choice in «deep green» environments who enjoyed particularly positive press from mainstream Western media [The Economist 2023, 13 December]. The KMT instead chose popular pro-unification media commentator Jaw Shaw-kong (趙少康). Jaw’s selection was also coupled with the choice of Han Kuo-yu to lead the list of KMT at-large candidates. The party’s reliance on deep-blue figures showed an electoral strategy aiming at mobilizing the party’s traditional base notwithstanding the opposition of the majority of the Taiwanese public to pro-unification positions [ECS 2023]. This strategy relied on the assumption that the KMT would not need to move to the centre given the split of historically green constituencies between the DPP and the TPP.

The first TVBS poll after the official registration of candidates appeared to validate the KMT’s choice, with Hou closely trailing Lai, standing at 31% against 34% in a poll with a 2.3% margin of error [‘Dengji canxuan’ 2023]. Indeed, throughout late 2023, the KMT enjoyed considerable momentum in opinion polls. Message coordination with Beijing played a crucial role, as both KMT candidates and Chinese officials and media successfully framed the election as a choice between «war and peace», with the DPP as the main culprit for current tensions with Beijing [Blanchard 2024, 3 January; Woo & Pomfret 2024, 11 January]. On the back foot, the DPP and especially its candidates in the legislative election shifted the focus away from Taiwanese nationalist and anti-China rhetoric to assuage non-partisan voters [Hewitt et al. 2024, 12 January]. The last Formosa poll before the pre-electoral silence gave Lai a 4.3% lead on Hou, while the last TVBS poll gave him a 3% lead [‘Meilidao’ 2023; ‘TVBS’ 2023b]. Ma Ying-jeou involuntarily helped the DPP with an interview with Deutsche Welle released on 3 January 2024. Ma stated that «no matter how much you defend yourself you can never fight a war with the Mainland – you can never win. They are too strong, much larger than us. So, we should use peaceful means to reduce the tensions», thus openly disagreeing with Hou’s own promise to raise military spending. Furthermore, Ma argued, in a tone-deaf manner given the Taiwanese public’s attitudes towards China, that in cross-Strait relations, «you need to trust Xi Jinping» [Walker 2024, 12 January].

Ma’s interview was released during the period of pre-electoral silence, so it was not possible to assess the direct impact on voter intentions. Yet Hou’s public disavowal of Ma and reiteration that he did not intend to enter unification talks with China in case of victory, as well as the KMT decision to exclude the former ROC President from the party’s end-of-campaign rally were evidence of the perceived damage that his statements inflicted on the party [Shan 2024, 12 January].

4. Cross-Strait relations and the role of the United States

China’s attempts to shape Taiwanese politics and the choices of the island’s elites and public throughout 2023 did not qualitatively change compared to previous years. Recent scholarship has applied the «hybrid influencing» framework to explain Beijing’s modus operandi [Aukia 2023; West & Insisa 2024]. Hybrid influencing, definable as an actor’s orchestrated execution of multiple activities across different domains to attain their goals, creates a context where kinetic warfare is relegated to the far end of the operational spectrum, while still resulting in a cognitive environment haunted by the threat of military force [Salonius-Pasternak 2017; Cederberg et al. 2017]. In contrast with other similar framings used to explain China’s modus operandi in relation to Taiwan, hybrid influencing has the advantage of comprehensively explaining Beijing’s attempts to uphold a credible military threat while at the same time continuing to pursue influencing operations.

Economic statecraft, lawfare (the instrumental use of legal tools to achieve political objectives), and more broadly «hybrid» activities played, as in previous years, an important role in Chinese attempts to exercise pressure over Taiwan. On 5 January, it was announced that ferry links between Fujian and the Taipei-controlled outlying islands of Kinmen and Matsu would resume after a pandemic-era suspension. Yet, by February, Taiwanese authorities had announced that Chinese civilian vessels had damaged undersea cables connecting the islet of Tungyin to Matsu, and Matsu itself to Taiwan, impeding access to the internet among these communities [Wang J. 2023, 7 March]. As in similar cases in the past both on the Taiwan Strait and in the South China Sea, the involvement of civilian vessels suggests a «grey zone operation». On 14 March, Honduras announced the switch of diplomatic relations from the ROC to the PRC, leaving Taipei with only 13 diplomatic allies. Nauru followed suit in January 2024 immediately after Lai’s election.

On 21 August, Chinese authorities banned the import of Taiwanese mangoes, citing the presence of pests, in line with previous acts of economic statecraft targeting Taiwanese producers. The following month, on 12 September, Beijing launched a new set of measures aiming to foster Taiwanese investments in Fujian [SCIO 2023]. However, the following day, the Taiwan Affairs Office (TAO) announced a review by the PRC Ministry of Commerce (MoC) of the preferential tariffs granted to Taiwanese goods under the Economic Comprehensive Framework Agreement (ECFA) signed in 2010 for «unfair trade barriers» [Shen & Wu 2023, 27 December]. The saga continued until December when the PRC MoC announced the conclusion of its investigation and the re-imposition of tariffs on Taiwanese chemical products that had been removed following the ratification of ECFA. These moves were coupled with the threat to further remove products from the ECFA early harvest list [Shen & Wu 2023, 27 December]. At the same time, however, Beijing announced the lifting of the ban imposed the previous year on the trade of groupers from selected Taiwanese fisheries [Blanchard 2023, 22 December].

Two more issues must be considered to provide a comprehensive picture of Chinese hybrid influencing in 2023. The first concerns alleged Chinese efforts to shape Taiwan’s information environment as the 2024 elections approached. Multiple reports and articles chronicled widespread, systematic, AI-supported, and AI-generated disinformation efforts. These information operations aimed at swaying voters towards the KMT, mainly by (1) spreading fake news against the Tsai administration and the DPP candidates, (2) emphasizing the «unreliability» of the US as a de facto guarantor of Taiwan’s security, (3) providing a distorted image of the electoral competition through fake polls [Köckritz 2023; Zhang 2024]. Taiwanese authorities responded with explicit condemnation of China’s electoral interference, highlighting its hybrid nature beyond the narrow information domain [Blanchard 2023, 4 October]. Such assessments were also confirmed by Google’s Threat Analysis division close to election day, when, on 1 December, it warned of a massive increase in Chinese cyberattacks on Taiwan in the last six months [Gallagher 2023, 29 November]. As discussed in the previous section, by the last few months of the Taiwanese electoral campaign, the message of Chinese authorities appeared to be closely coordinated with that of the KMT, framing the election as a choice between «war and peace». For instance, on 26 October, a PRC Defence Ministry spokesperson warned that DPP authorities were pushing Taiwan towards «a dangerous and dreadful war» [PRC MoD 2023].

The second issue concerns China’s military activities targeting Taiwan, a process in which the action-reaction at the heart of the triangular relation between Taipei, Beijing, and Washington is displayed in full sight. As early as November 2022, the Biden administration had publicly expressed its intention to set «guardrails» in Sino-American relations after the extreme tensions that had emerged, particularly following Nancy Pelosi’s visit to Taipei in 2022, which had led to the most extensive and sensitive military activities by the People Liberation Army (PLA) since the Third Taiwan Strait Crisis between 1995 and 1996. Yet, this tactical détente between the two superpowers was months in the making and started to become more concrete only by the second half of 2023 [Gupta 2023]. On 20 January, US Secretary of State Antony Blinken publicly stated that China was no longer comfortable with the status quo on the Strait [US DoS 2023], while on 17 February, US Deputy Assistant Secretary of Defense for China Michael Chase visited Taiwan. On 30 March, President Tsai arrived for her last transit visit to the US as ROC President while en route to a tour of the island’s diplomatic allies Belize and Guatemala. In the US, Tsai met members of the US Congress, the governor of New Jersey, and, above all, Pelosi’s successor, the Republican Kevin McCarthy. The PLA’s response, while still forceful, was carefully calibrated and subdued compared to the previous year [Lin et al. 2023]. Still, on 10 April, Taiwanese authorities announced a record-breaking detection of PLA aircraft and ships around Taiwan [‘Taiwan ADIZ’].

Even as Washington and Beijing lowered tensions in the second half of the year, the action-reaction dynamics continued. On 18 September, Under Secretary of Commerce for Standards and Technology Laurie Locascio led a new US delegation to Taipei. On the same day, Taiwanese authorities registered a new high of 103 PLA aircraft (30 fighter jets) and 9 vessels surrounding the island [‘Taiwan ADIZ’]. Moreover, only three days earlier, Chinese authorities had sanctioned US defence companies Northrop Grumman and Lockheed Martin for their role in US weapons sales to Taiwan [Cash & Lee 2023, 15 September]. On 27 September, a TAO spokesperson framed PLA’s military drills as a way to oppose the «arrogance» of Taiwanese «separatists» [TAO 2023c]. Finally, at a press conference held on 16 November, Chinese Minister of Foreign Affairs Wang Yi (王毅) remarked, in the wake of the meeting between Chinese leader Xi Jinping (习近平) and US President Joe Biden at the APEC summit in San Francisco, that the «Taiwan question remains the most important and most sensitive issue in China-U.S. relations» [PRC MFA 2023]. Close to the election, on 20 December, US «current and former» officials leaked to the press that Xi had «bluntly» told Biden that «Beijing will reunify Taiwan with mainland China but that the timing has not yet been decided» [Welker et al. 2023, 20 December].

Against this backdrop, Tsai’s administration and the DPP made progress in its defence policy, certainly with an eye on the coming elections. On 20 January, the DPP-majority Legislative Yuan passed a budget including US$ 19.1 billion spending tally on defence, amounting to an 11.3% rise in defence spending on a year-by-year basis. The year in review saw instead the executive led by Prime Minister Chen Chien-jien (陳建仁) requiring a further 7.7% rise in the defence budget for a total of US$ 13.9 billion, together with an additional US$ 2.97 billion special budget for the purchase of weapon systems [Nakamura 2023, 24 August]. The ROC Armed Forces also staged «larger, louder, better-coordinated» military exercises for its annual Han Kuang event, with the Tsai administration infusing a renewed sense of urgency into the population [Wang J. 2023, 28 July], while on 21 September, they unveiled their first indigenous, Hai Kun (Narwhal) class, diesel-powered submarine, announcing its deployment in May 2024 [Hille 2023, 28 September].

The bilateral, unofficial relations between Taiwan and the US continued to progress, especially in the economic dimension, but also faced some problematic developments. On 14 January, talks for the US-Taiwan 21st Century Trade Framework, the new free trade agreement between the two parties, began in Taipei. Conducted by the respective de facto embassies, the American Institute in Taiwan (AIT) and the Taiwan Economic and Cultural Representative Office (TECRO) in Washington, the talks led to the signature of a first agreement covering customs administration and trade facilitation, good regulatory practices, services domestic regulation, anticorruption measures, and small and medium-sized enterprises in June [OUSTR 2023]. The legislation was eventually approved by Biden on 7 August. Additionally, on 22 December, President Biden signed into law the National Defense Authorization Act (NDAA) for the 2023 fiscal year. It included multiple provisions in support of the Republic of China Armed Forces (ROCAF). Section 1313 of the NDAA, in particular, authorized the Commander of USINDOPACOM (the American unified combatant command in the Indo-Pacific) to «carry out military exercises with Taiwan» [United States Congress 2023; The White House 2023b]. As a result, by February 2024, US Army Special Forces advisers arrived in the outlying Kinmen and Penghu Islands where ROC Army counterparts are stationed [Hong 2024, 5 February].

However, the deadlock within the US House of Representatives caused by the Republican majority’s request to tie aid to foreign partners to a bill on border security, which was in fact responding to the opposition of the party’s «MAGA» wing to any kind of bipartisan legislation, delayed further American support for Taiwan. A US$ 2 billion request for supplemental funding for the Indo-Pacific, which would also cover Taiwan, failed to go through before the end of the year. Furthermore, the presumptive nominee of the Republican Party for the presidential elections, former President Donald Trump refused to guarantee US protection of the island in case of a Chinese attack, simply stating that it had taken away «our chip business», a reference to the delocalization of the American semiconductor manufacturing sector by the turn of the century [Moriyasu & Satoh 2023, 30 January]. Crucially, Trump’s ambiguity certainly bolstered Chinese messaging about the unreliability of the US as a de facto security guarantor for Taiwan.

5. Beyond Beijing and Washington: Taiwan in 2023 international politics

Throughout 2023, despite the absence of formal diplomatic relations, the Tsai administration continued to strengthen ties with other liberal democracies in the Indo-Pacific region and beyond. The year began with a significant visit by the Chairman of the Alliance of Democracies Foundation and former NATO Secretary General Anders Fogh Rasmussen, on 3 January. Rasmussen emphasized the struggle against autocratic powers which Ukraine and Taiwan share [Lee 2023, 4 January]. In a notable diplomatic move, Czech President-elect Petr Pavel held a phone call with Tsai in the same month, marking a path-breaking decision by a European elected head of state and underscoring the Czech Republic’s pivot away from China in recent years [Blanchard & Muller 2023, 31 January]. However, perceptions of Taiwan’s reliance on a wide Euro-Atlantic front were challenged by an interview with French President Emmanuel Macron, conducted during his return from a state visit to China and released by the French newspaper Les Echos on 9 April. In the context of discussions on Europe’s «strategic autonomy», Macron argued against any «acceleration» of the Taiwan issue due to the «American rhythm» and «Chinese overreaction» [Barré 2023]. Despite Macron’s position, subsequent G7 communiqués issued in April, May, and December emphasised the group’s interest in stability in the Taiwan Strait, opposition to unilateral changes to the status quo, and support for Taiwan’s participation in international organizations [JMOFA 2023a; JMOFA 2023b; European Council 2023].

In 2023, Taiwan’s unofficial relations with Germany experienced significant momentum, marked by the first visit to the island by a member of the German cabinet since the 1990s. Minister of Education and Research Bettina Stark-Watzinger visited Taiwan on 21 March [‘German minister’ 2023]. This renewed engagement was largely driven by the US$ 8.3 billion investment by TSMC, the giant Taiwanese multinational semiconductor contract manufacturing and design company, to establish a semiconductor foundry in the German city of Dresden. This investment was approved by TSMC in August and cleared by Taiwanese and German authorities in October and November, respectively [Pasquini 2023, 7 November]. Taiwan’s relations with Italy also witnessed notable developments, including the opening of a second representative office in Milan, Italy’s financial hub, and the first visit of an Italian delegation of elected representatives to the island since 2016. However, Italy’s engagement with Taiwan remained cautious due to ongoing negotiations with Beijing regarding Italy’s withdrawal from the Belt and Road Initiative [Insisa 2023a]. A planned delegation from the ruling Brothers of Italy party in April was cancelled, but eventually, two senators from the League, a junior partner in the ruling coalition, visited the island, emphasizing that their visit was of a personal rather than institutional nature [Pompili 2023, 15 June]. Taiwan-EU relations also saw incremental progress, although Taipei’s hopes to establish a trade- and technology-focused framework with Brussels, thwarted by the von der Leyen Commission in 2021 [Bermingham 2021, 17 November], were not revived. High Representative Josep Borrell, a few days after Macron’s interview for Les Echos, stressed that «any attempt to change the status quo by force would be unacceptable» [Yew & Lee 2023, 14 April]. Taipei and Brussels held their second Trade and Investment Dialogue [European Commission 2023] and their ninth Taiwan-EU Industrial Policy Dialogue [Lin 2023]. Furthermore, the EU Parliament, known for its clear support for Taiwan, passed two resolutions in December, advocating for a comprehensive upgrade of relations with Taiwan and rebuking China’s behaviour in cross-Strait relations [EP 2023a; EP 2023b].

In 2023, Taiwan made also notable progress in its efforts to expand trade and financial ties with major Western democracies. In November, Taiwan signed the Enhanced Trade Partnership with the UK [UK Gov 2023], and in December, it reached an investment protection agreement with Canada [Tseng & Teng 2023, 22 December]. Notably, both the UK and Canada are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a transregional mega free trade agreement led by Japan. Taiwan has long sought access to the CPTPP but has faced challenges due to Japanese caution and Chinese pressure [Insisa 2023b]. Relations with Japan did not witness significant public developments throughout the year. However, Prime Minister Kishida Fumio emphasized in a statement issued before the Hiroshima G7 Summit that peace in the Taiwan Strait concerns Japan and the international community [Oba & Obe 2023, 10 May]. Expanding to other American allies in the Indo-Pacific, it is worth mentioning the Joint Statement of the Leaders of the US and the Philippines issued on 1 May. In a ground breaking move for Manila, the statement echoed the language used by the G7 regarding Taiwan [The White House 2023a]. Manila’s decision to align with the G7 language on Taiwan can be understood in the context of its pivot away from Beijing towards Washington under the Marcos presidency and the resurgence of territorial disputes with Beijing in the South China Sea [Sutter & Huang 2024: 90-91; Ayson and Reyes 2024].

6. The Taiwanese economy in 2023

Major economic indicators for 2023 show the continuation of many negative trends that began in 2022, highlighting a sputtering economy that complicated the electoral prospects of Lai and the DPP. National statistics estimated that Taiwan’s GDP grew by 1.4%, in contrast with the 2.59% recorded in 2022, and the lowest since 2009, during the global financial crisis [DGBAS 2024]. Both total exports and total imports saw sizable contractions. Exports decreased by 9.8%, standing at US$ 432.4 billion, while imports saw a collapse, decreasing by 17.8% and standing at US$ 351.9 billion. The trade balance recorded thus a US$ 80.56 billion surplus, for an annual change rate of 56.9% [MF 2024]. Exports to Mainland China and Hong Kong decreased by 18.1%, amounting to US$ 152 billion and covering 35.2% of all exports (in contrast with the 33.4% of the previous years). Exports to the US instead increased by 1.6%, amounting to US$ 76.2 billion and covering 17.6% of all exports (in contrast with the 21.3% of 2022) [MF 2024]. Imports from Mainland China and Hong Kong stood at US$ 71.5 billion, contracting by 16.1% and amounting to 20.4% of the total, while imports from the US contracted by 10.9%, with their value standing at US$ 40.6 billion and constituting 11.6% of the total [MF 2024]. Industrial production decreased by 3.99% compared to 2022, with a 4.19% decrease in the critical manufacturing sector [MEA 2024b].

Foreign direct investments (FDIs) in Taiwan amounted to US$ 11.2 billion for a total of 2310 projects, thus recording a 15.4% decrease in the total amount invested and a 9.98% decrease in the number of cases [MEA 2024a]. FDIs from China amounted to US$ 29.6 million, recording a 23.3% decrease on a year-by-year basis. Taiwan’s outward investments amounted to 896 projects for a total of US$ 26.6 billion, recording a 176.4% increase compared to 2022. The outward investments to Mainland China decreased by 11.8%, amounting to US$ 3 billion – 39.8% less than in 2022 [MEA 2024a]. Estimates of the labour force saw a 3.3% unemployment rate, in contrast with the 3.51% recorded the previous year [NS 2024], while inflation remained high for Taiwanese standards, with the Consumer Price Index recording a 2.5% rise on a year-by-year basis [Pan & Huang 2024, 5 January].

7. Conclusion

William Lai’s victory in the presidential elections confirmed that a majority of the Taiwanese public is still sceptical about engagement with China and the KMT’s handling of the island’s security. Above all, the Taiwanese public appeared to prefer the unresolved continuation of the fragile status quo in the Strait – and understandably so. However, the DPP’s defeat in the legislative elections and the consequent loss of the majority in the LY show that a value and security-driven agenda alone is not sufficient in the long term. Both the KMT and, in particular, a populist party such as the TPP, have been able to capitalize on the DPP’s inability to solve Taiwan’s long-standing economic issues – even though the only solutions they both propose rely on vague promises of rapprochement with Beijing that ignore the Chinese Communist Party leadership’s own calculus and aspirations for unification. The domestic situation draws parallels with Taiwan’s predicament in external politics. The year 2023 saw concrete developments in trade relations and in the struggle against isolation in international politics, yet no real breakthroughs have been achieved, nor do they appear realistic – possibly with the exception of the US-Taiwan Initiative on 21st Century Trade, which is still in its early stages. In fact, the isolationist push of «MAGA» Republicans and the possibility of a second Trump presidency, as well as cautious calls from a champion of Europe’s «strategic autonomy» such as Macron, sow doubts on the solidity and durability of the Euro-Atlantic democratic front that has been gradually strengthening its support for the Tsai administration, particularly in its second term. But above all, these developments cast a long shadow over the coming term of President-elect Lai.

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