Taiwan

The 2010 municipal elections showed a reinvigorated Democratic Progressive Party (DPP), and its strong showing has strengthened its position heading into the 2012 elections. The DPP recognises the mainland's rising importance to the Taiwanese economy, and recent events suggest a shift in the party's hard-line pro-independence stance, possibly making it more appealing to the moderates. We believe the DPP's ability to find a way to maintain healthy cross-strait relations - given the lucrative economic benefits they bring - is vital to its election prospects. On the whole, the DPP should pose a much stronger challenge to the ruling Kuomintang (KMT) in the upcoming elections as compared to 2008.

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