The watchword for the new Lai administration is “continuity,” with an emphasis on maintaining close ties with the United States, avoiding any cross-Strait crisis, and pursuing policies to cut Taiwan’s carbon footprint.
When Lai Ching-te takes office on May 20 as the eighth President of the Republic of China (Taiwan), he will come equipped with an extensive background in government affairs. The 63-year-old President-elect, who also uses the English first name William, has served as a member of the Legislative Yuan (1999-2010), Mayor of Tainan (2010-2017), Premier (2017-2019), and Vice President (since 2020).
Journalist Vincent Cheng, who has reported on the President-elect since Lai’s days as mayor, describes him as “someone who always tries to be perfect.” Cheng, now managing editor of CommonWealth magazine, said at a recent forum for foreign media that Lai “can be very demanding [of his staff], especially in a crisis situation, since he wants to get all the details.”
The holder of a Master’s degree from Harvard in Public Health, Lai was a medical doctor specializing in rehabilitation therapy for patients with spinal cord injuries before shifting to a political career in 1996. He has written that in reaction to Chinese efforts to influence Taiwan’s presidential election that year by firing missiles into waters near the island, he felt a calling to do his part to help protect Taiwan’s democracy.
As the nominee of the Democratic Progressive Party (DPP) in this year’s election, held on January 13, Lai captured 40% of the vote in a heated three-way race. He defeated the Kuomintang’s Hou Yu-ih (33.5%) and Ko Wen-je of the Taiwan People’s Party (26.5%). The victory, following the eight-year tenure of President Tsai Ing-wen, enabled the DPP to become the first political party to win three consecutive presidential terms since the start of Taiwan’s democratic era in 1996.
During the campaign, opponents sought to make an issue of Lai allegedly having built a house on public land, though his grandfather had apparently been given rights to the property as a coal miner. The attack backfired by drawing increased attention to Lai’s humble working-class roots and personal success story. After his father died in a mining accident when Lai was a young boy, he and his five siblings were raised by his mother.
In his run for the presidency and as President-elect, Lai has emphasized the theme of continuity. “He has spent most of the last two years convincing the world that he is a version of Tsai 2.0, and I believe his presidency will largely stick to that path,” National Chengchi University political scientist Lev Nachman told Taiwan Business TOPICS.
Although Lai may also seek to put his own stamp on his administration, he is not known to have any major policy disagreements with Tsai, despite having challenged her in the DPP’s 2020 primary election when she seemed to be faltering in public opinion polls. But in a show of party solidarity, a re-elected Tsai invited Lai to serve as her vice president.
The new administration’s handling of cross-Strait challenges will undoubtedly be a key factor in how its performance is measured at home and abroad. Beijing tends to distrust any DPP leader, but it has treated Lai with particular suspicion, portraying him as a radical for having described himself years ago as a “pragmatic worker for Taiwan independence.”
Lai’s supporters suggest that the emphasis in that phrase should be put on the word “pragmatic.” They note that Lai has joined Tsai Ing-wen and other DPP leaders in defining Taiwan’s status as already being a “sovereign, independent country,” with no need to take any steps Beijing might regard as provocative. In its China policy, the Lai administration can be expected to be one of “no surprises,” Victor Cheng told the media forum.
Central to managing cross-Strait tensions will be assuring continued strong U.S. support for Taiwan. The incoming administration appears well-positioned to do that. “Washington’s topmost priority is preserving peace and stability in the Taiwan Strait, and there is broad confidence in Washington that Lai will be a partner in protecting that imperative,” notes Ryan Hass, director of the Thornton China Center and holder of the Koo Chair in Taiwan Studies at prominent D.C.-based think tank the Brookings Institution. “Lai’s emphasis on continuity and his appointment of well-known advisors to senior roles in his government has been reassuring,” Hass said by email to TOPICS.
Perhaps the most significant of those choices was his selection of Hsiao Bi-khim, Taiwan’s representative in Washington during the second term of the Tsai administration, as his vice presidential running mate. Although Hsiao, 52, did not have the title of ambassador due to the lack of formal diplomatic relations, “she was one of the most effective diplomats Washington has seen in years,” Hass wrote.
The daughter of an American mother and Taiwanese father, Hsiao grew up mainly in Taiwan in a bicultural, trilingual (counting Hoklo) environment, graduated from Oberlin College in Ohio, and earned a Master’s degree from Columbia University in Political Science. She was a member of the Legislative Yuan for 14 years and at times also served as head of the DPP’s international affairs department.
Besides her U.S. connections, Hsiao has also been effective in cultivating contacts in other regions, especially Europe. As Vice President-elect, she made discreet visits to the Czech Republic, Lithuania, and Poland, and also met in Brussels with members of the European Parliament, including its First Vice President.
In terms of diplomatic outreach, the Lai administration is also expected to seek to build on the progress of Tsai’s New Southbound Policy in expanding economic and cultural ties with countries in the Indo Pacific. Lai, Taiwan’s representative to the funeral of former Japanese Prime Minister Shinzo Abe in 2022, is said to have good contacts in Japanese political circles.
Domestic concerns
On the home front, the Lai administration will be faced with a number of priority concerns:
Energy sufficiency and climate control. Lai has committed to continuing Tsai’s policy of achieving net-zero carbon emissions by 2050, but reaching that goal will be a challenge. Taiwan’s efforts to substantially increase reliance on renewable energy, especially offshore wind power, have run into difficulties, and further expansion of LNG-receiving terminals is required. The new administration will need to address developers’ complaints about costly local-content requirements, excessive red tape, and inadequate tariffs. Lai will also be held to campaign promises to develop additional energy sources such as geothermal and hydrogen, promote carbon capture and storage technologies, and otherwise meet the DPP’s policy objectives, but he may need to extend operations at Taiwan’s remaining nuclear power plants beyond their original lifecycle to ensure electricity suffiency.
Healthcare. Given Lai’s medical background, healthcare is likely to be an area of special attention. It was the subject of a major portion of his presentation at an AmCham Taiwan luncheon during the election campaign. He pledged to reform National Health Insurance to meet the needs of a superaged society, strengthen Taiwan’s biotech sector, increase public investment in cancer prevention and treatment programs, and encourage the use of new technologies to advance Taiwan’s medical capabilities.
Socioeconomic policies. Although the Taiwan economy has continued to perform well, thanks largely to its world-leading semiconductor industry, some nagging problem areas exist. Notably, these include stagnating salary levels and steep property prices that keep home ownership out of the reach of many people. These issues are particularly pressing for younger people, and partially explain why the youth vote – once a source of significant support for the DPP – went heavily for Ko Wen-je in the January balloting. “In the new administration, one priority will be to regain the support and trust of the younger generation,” notes Victor Cheng.
Defense. Lai can be expected to maintain the Tsai administration’s emphasis on promoting peace while simultaneously enhancing Taiwan’s ability to defend itself, both through arms sales from the United States, the indigenous development of submarines and other weapons systems, and better training of volunteers and conscripts in the armed forces.
In some of these areas, the new administration’s ability to enact its policies will be constrained by its loss of majority control in the Legislative Yuan. In the new legislature, no single party holds more than half the seats. While the “blue-white” bloc of the Kuomintang and Taiwan People’s Party may combine to outvote the DPP on some issues, on other issues there may be room for parliamentary “horse-trading” or other maneuvering, testing the administration’s capacity for flexibility.
A New Team Takes Over
President-elect Lai and his choice to serve as Premier, Cho Jung-tai, have filled key Cabinet and other high-level positions with a mix of veteran officeholders and a large number of fresh faces.
Although hardly a newcomer to the political arena, Cho Jung-tai himself is less well-known to the general public than most of his predecessors in the Premiership. Known as a skillful communicator and policy coordinator, the 65-year-old Cho’s ability to work smoothly with members of other political parties is expected to be an asset in dealing with the currently divided legislature. Among his previous positions were member of the Legislative Yuan, Deputy Secretary-General of the Presidential Office, Minister without Portfolio and government spokesperson, Secretary-General of the Executive Yuan, and Chairperson of the DPP.
Like nominated Vice Premier, former Minister of Cultural Affairs Cheng Li-chun, Cho has been a close confidante of Lai’s and was active in his presidential campaign. For her part, Cheng has also been a legislator and the head of culture-related NGOs. She holds a master’s degree from a French university.
Some appointments have involved a reshuffling of positions among incumbent officials. After six years as Foreign Minister, Joseph Wu has been named Secretary-General of the National Security Council, succeeding Wellington Koo who will now become Minister of National Defense, the first person from a non-military background to hold that post since 2013. A prominent lawyer, Koo was previously Chairperson of the Financial Supervisory Commission and head of the Ill-gotten Party Assets Settlement Committee.
Taking over as Foreign Minister will be Lin Chia-lung, currently Secretary-General of the Presidential Office. A Ph.D. in Political Science from Yale, Lin was previously mayor of Taichung and Minister of Transportation and Communications.
The new minister who has stimulated the most public discussion is J.W. Kuo, co-founder of Topco Scientific and chairman of the Topco Group, Taiwan’s largest supplier of materials to the semiconductor industry, who will become Minister of Economic Affairs. The holder of a Ph.D. in Business Administration from National Taipei University with no prior government experience, Kuo has been hailed by supporters as a successful entrepreneur with deep knowledge of the crucial technology sector. The KMT has criticized his selection, pointing to his past violations of the Securities and Exchange Act and business connections in China.
Also tapped from the private sector was Paul Liu, former chair of PricewaterhouseCoopers (PwC) Taiwan and general manager of the IBM Business Group, to be Minister of the National Development Council. Incumbent minister Kung Ming-Hsin will become Secretary-General of the Executive Yuan.
Other key appointments include:
• Chairperson for the Financial Supervisory Commission, Peng Jin-lung. He has a Ph.D. in Business Administration from National Chengchi University and is currently associate dean of the university’s College of Commerce. His specialties include insurance and risk management, and he previously served as Secretary to the Office of the Minister of Finance.
• Minister of Digital Affairs Huang Yen-nun. The holder of a Ph.D. in Computer Science from the University of Maryland, he is a distinguished research fellow at Academia Sinica and holds more than 20 U.S. patents. He succeeds MODA’s first minister, Audrey Tang.
• Minister of Environment Peng Chi-ming. The holder of a Ph.D. in Meteorology from National Central University, Peng has been an advocate of weather risk management and disaster prevention.
• Minister of Health and Welfare Chiu Tai-yuan. A medical doctor who was previously Director of the Outpatient Department at National Taiwan University Hospital, Chiu has chaired both the Taiwan and Taipei Medical Associations and served a term in the Legislative Yuan.
• Minister of Labor Ho Pei-shan. Currently Deputy Secretary-General of the Executive Yuan, she has broad experience dealing with labor issues.
• Minister of the National Science and Technology Council Wu Cheng-wen. Currently president of the Southern Taiwan University of Science and Technology, he earned a Ph.D. in Electronics & Communications Engineering from the University of California Santa Barbara and has been recognized for research contributing to Taiwan’s semiconductor industry development.
• Minister of the Public Construction Commission Chen Chin-te. A former chair of the state-owned oil company CPC Corp., Taiwan, his experience also includes two terms in the Legislative Yuan and serving as Acting Commissioner of Yilan County.
In line with Lai’s pledge to choose top officials based on merit, many of those selected have no political party affiliation. Additional appointments were still pending as this issue of TOPICS went to press.
