Taiwan: DPP Weaker than 2020
The DPP have won the Taiwan presidential election. However, the DPP has lost its majority in parliament, while the 3rd party (Taiwan People Party (TPP) are signalling they will not form a coalition with (Kuomintang) KTT. This will restrain the DPP. However, China will still likely show its displeasure, with large scale military exercises in the spring.
While the DPP candidate (Lai Ching Te) was elected president, the DPP did not do as well as the 2020 election. Firstly, in the presidential vote Lai Ching Te attracted 40% compared to 57% for DPP Tsai Ing Wen in 2020. Secondly, the DPP lost its majority in parliament and achieving only 51 seats compared to the 52 for the KTT. With 57 seats needed for a majority the TPP with 8 seats is now key, but has signalled that it is unlikely to form a formal coalition with KTT and instead will align on a vote by vote basis. Nevertheless, KTT and TPP have tried to work together in the past and the DPP is likely to lose out in parliament.
This is important as the last time such an imbalance of power occurred 10 years ago, it saw parliament slowing the build-up of military expenditure by the president. This all means that the DPP president is in a weaker position than 2020.
While China will take note of less power for the DPP, the election of a DPP president will still likely cause displeasure from China in 2024. Already China government has been critical, but the key for geopolitics is military movements in the coming months (here). The most likely flashpoint remains the spring, where large scale military exercises are expected. The question is whether this will be on a larger scale than in the past or alternatively whether China could test the 12 mile limit. Taiwan has warned China air force that breaking the 12 mile limit would produce retaliation. We expect that China will be incremental in pressure and not want to produce a sequence of direct military clashes with Taiwan, but this will still be enough to raise the geopolitical temperature.