Political Risk Analysis - Cross-Strait Ties To Remain Strained As Local Elections Loom - MAR 2018

BMI View: Cross-Strait ties are likely to remain strained over the course of 2018 as China maintains its assertive stance while Taiwan is likely to present a more robust response as compared to 2017. With Taiwan set to hold local elections in 2018, we expect to see the ruling DPP take a stronger stance against the mainland's actions as it seeks to shore up support amid President Tsai Ing-wen's weaker approval rating.

Taiwan's political scene in 2018 will likely continue to be characterised by strained cross-Strait relations as China maintains its assertive stance following the mainland's 19th Party Congress, which saw Chinese President Xi Jinping consolidate his power further. We believe that bilateral relations are likely to remain tense over the coming year and expect the mainland to persist with its actions as it seeks to curtail Taiwan's international space. Domestically, Taiwan will hold local elections in 2018 and we believe that this will likely see the Tsai Ing-wen administration present a more robust response to Chinese actions as it seeks to ensure that it will retain its seats in the local elections amid Tsai's falling approval rating.

China To Maintain Assertive Stance

Cross-Strait Issues Remain A Key Flashpoint
Asia - Regional Flashpoints
Source: BMI

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