Hiatz Weskasova. The Big Take is taking a break this week, so here's an episode you might have missed. Consequences are coming right quick, with missile firings in the East China see and now supposedly military operations surrounding Taiwan.
In the last few days, China flew seventy two airplanes across the midline of the Taiwan Straight How.
Would the world respond if China invaded Taiwan? That question is increasingly on the minds of leaders around the world. President Biden said last year that the United States would consider using military force to defend Taiwan.
Are you willing to get involved militarily to defend Taiwan if it comes to that, Yes, you are.
That's the commitment we made.
That drew a sharp rebuke from Beijing, which sees Taiwan not as an independent entity but a part of China that will one day be united with the mainland. The terms of Taiwan's relationship with China is the central issue in the closely watched presidential campaign underway there. The front runner right now among several candidates is Taiwan's current Vice president le Chinda of the Democratic Progressive party it's known as the DPP. Laia is hoping to succeed President, saying
when she can't run again because of term limits. He's taken a firmer stance on Taiwan's independence than some of the other candidates.
We are willing to cooperate with China to advance peace and prosperity. However, untier China relong states the force against Taiwan. We must strengthen our military capacity and stand shoulder to shoulder, which democracies to activity deter the straits from China.
That's lie. Speaking to Bloomberg BusinessWeek editor Joel Weber, he recently sat down with the Vice president for several wide ranging interviews in Taiwan.
That's the ultimate tension here is can Taiwan preserve this democratic DNA that has really been the foundation of its prosperity and keep Beijing away?
Joel and Bloomberg's deputy Taipei Bureau chief, Cindy Wang, are here with me to talk about what's at stake for Taiwan and the heavy burden the next president will face. I'm west Kosova today on the big take an election for Taiwan's future. Cindy there's this very important presidential election coming up in Taiwan, and of course all presidential elections are important, but this one seems to have extra significance. Why are people paying so close attention to this one?
Yeah, that's right. I think when people talk about Taiwan these days, the first question that comes to people's mind would be where there be a war across the Taiwan Strait. So the key question that everybody wants to note about Taiwan is how it's going to handle China. And well, China probably invade Taiwan sometime and that concerns everybody, especially because Taiwan is the very important tech cub that has
this world famous se conductor industry. So I think this election is especially important because it's all about war, and that's also what many people in Taiwan are worried about right now. So people here are also anxious to know whether the next president of Taiwan will be able to handle the tricky relationship with China and how he can or she can help Taiwan reduce the risk of war.
And right now it looks like the ruling party DPP's presidential candidate lighting that he's a front runner in most of the polls now, and if DPB wins again, it would be the first time in Taiwan that a political party could govern for a third term, and that would probably mean more people in Taiwan now see themselves as a Taiwanese and that's going to send a very strong signal to China because there is a risk that China's nationalism will be so high that it could increase the
chance of a war across the strait.
Jolis Cindy said, the current vice president, like Chenda, is the front runner in the race, and you went to Taiwan to go speak to him, tell us about him.
Well, I can't imagine a more complicated geopolitical situation than the one that's in Taiwan. And I think coming to the situation from the US, there's this outsider vibe that I think I brought to it, which was I'm just going to drop into this place and I just expected there to be this cloud of China that was over everything, and I was actually kind of surprised that that's not
how it felt. It felt like everyone going about their normal lives and then all of a sudden there would be reminders of that presence and I think Lie actually is a pretty good embodiment of that. He's an incredibly calm, mild manner, or at least that's what he wants to project. He was a doctor originally and entered politics actually in nineteen ninety six and has sort of risen through the Taiwanese political apparatus as a member of the DPP, which
has always been pro Taiwan, pro democracy. So he views himself as really a democratic candidate. And as much as we want to talk about war and this war sentiment, and that is one of the defining elements of this I think president election, he will frame it around democracy and that he wants to be a continuity candidate with the previous administration, which obviously he's the vice president of.
But there's a lot of questions that accompany that because he has a very interesting backstory, and again it speaks to how complicated of a geopolitical situation Taiwan represents.
Cindy, What does it mean when we say that LII wants to be a continuity candidate.
So Vice Persondent Lai has been known for his provocative comments in the past. He's known to the Taiwanese public as a strong advocate for Taiwan independence. So that's the impression that he left to most people in Taiwan here, So he has this kind of track record. He said many times in the past that he would be like
a pragmatic independence worker. Things like that and that kind of provocative comments really worry people and worry Beijing and US as well as people are worried that he may try to change the status quo, and that's something that nobody has a stake with Taiwan would like to see. At the moment, soli Is now has a very very important task. Is he has to prove to everyone, to the US, to China and even to people in Taiwan that he is going to be a very steady pair
of hands. He will not change the status quo. He has to maintain the status quo that present Thai has maintained over the past almost eight years. So we asked him during our sitdown interview with him whether there would be a romance to tell independence, whether he would consider change the name of Taiwan. So his answers to all those questions are no, there isn't going to be any change.
Currently the official name of Taiwan is the Republic of China, and he said, because present Thai has used the name Republic of China Taiwan to unite the Taiwanese people, and that's the name he would continue to use.
Joel Cindy says, people watch very carefully how LII describes Taiwan, and China certainly does too, and that's true of everyone. The way Taiwan talks about itself, the way China describes Taiwan is really at the heart of this whole question.
Right, And there's this status quo that a lot of the parties involved are trying to maintain, and everyone watches their words very carefully, me included me most of all. Actually, probably right when you read about this stuff, you got to be exacting and that was reflected actually in my interviews with La. He speaks decent English, but he actually chose to speak mainly in Chinese, I think out of caution, basically, to be super mindful of the words that were coming
out of his mouth. There are a couple of times that he opted to speak in English, but I think default setting for him was in Chinese because of the importance of getting his message rights. You what the stakes
really look like? Here. So what really comes down to here is Taiwan, in the eyes of Beijing is viewed as a breakaway province and under this One China policy that has become sort of the driving principle of beijing geopolitical goals, they view everything Taiwan included as part of a greater China and will be absorbed at a future date.
What that future date is, no one really knows. Taiwan wants it to be never and wants this status quo to remain where they are a democratically independent sovereign entity. So that's the ultimate tension here is can Taiwan preserve this democratic DNA that has really been the foundation of its prosperity and keep Beijing away?
I think status quo is really the key thing here. I think every party which has a stake in Taiwan all wants who preserve the status quo, although they may have different interpretation about the status quo. Some polls in Taiwan showed that at least three folds of Taiwan's population supports status quo. They don't want to be independent, they don't want to unification with China either, but they want
the status quo to go on. Since US and Taiwan cut ties about like four decades ago, so US switched ties to Beijing and recognized Beijing is China, and then from that moment on US stop recognizing Taiwan as a sovereign country. Instead, there is an ambiguity that acknowledged that China's idea that there is only one China and that's represented by People's Republic of China. But it just leaves the entity of Taiwan undecided. So that's the tricky thing
about the US One China policy. So even though US President Joe Biden has that four times that it would defend Taiwan, this ambiguity that US officially didn't recognize Taiwan as a country, so you can't really call Taiwan as a nation.
I think the other thing to keep in mind there is it's almost like everything just feels like it's on a hair trigger, and what everyone is fearful of is provoking, and what I think Beijing does is attempt to continue to push the envelope. There's a medium line in the middle of the Taiwan's rate. They've crossed it. They've fired missiles over Taiwan, They've done a partial naval blockade in response to former House Speaker Nancy Pelosi's visit a year ago.
So all of these things sort of challenged the status quo and the moment that Taiwan or the US were to respond in a way that might be a little too impulsive. For instance, Beijing will use that as an indication of change the status quote and maybe escalate the situation.
Joel, you asked Lie how Taiwan feels about the support it gets from the rest of the world.
Do you feel that the international community treats Taiwan justly?
I think so. I think so because Taiwan security is a global yishu and the piece in the Indo Pacific region benefit all the country.
I think that answer reflects just how complicated of a situation Taiwan's in With its diplomatic relationships around the world. There are official allies that Taiwan has thirteen of them, thirteen countries recognized Taiwan as a country and an ally, but that number is dwindled in recent years as China's flipped a couple of them, and right now actually Vice President Lie is in transit through the US to visit an official ally Paraguay. Paraguay happens to be a supplier
of beef to Taiwan. If you go to Taipei or anywhere in Taiwan, beef noodle soup is one of the dishes that is phenomenal. A lot of the beef in beef noodle soup comes from Paraguay. That gives you a sense of what they're going to talk about when live shows up. Is like the importance of this relationship between Paraguay and Taiwan. Right, But to go through the US, he can't have a round trip ticket that puts him in the US. He has to transit through here to
get to Paraguay. So he goes through New York on the way and then he goes through San Francisco on the way back. And that's all not to inflame China. So all of these diplomatic relationships that Taiwan has comes down to this sensitivities with China. And there's these official allies that Taiwan has, but there's also these unofficial ones.
And part of what the current administration President Si with Vice President Lai have done is really tried to lean into this informal, unofficial frame of like minded democracies they'll call it. So Japan is a huge part of that, Australia is a part of that, South Korea could be part of that. And then looking at Europe, which has suddenly looked to Taiwan because of Ukraine, I think to say, wow, here's a place that we should also be supporting. And
then of course the US. So there's this patchwork quilt that Taiwan hopes has its back.
And as you say, Lie has to transit through the US bocanishally stop there. Like you would never see the president or vice president of Taiwan visiting Joe Biden at the White House.
Not only would you not see Lie visiting DC, you won't see the president of the vice president go to Taiwan. And that's why when former Speaker of the House Nancy Pelosi showed up, it escalated the situation, and I think a year later, we're still in the aftermath of that, and that's one of the reasons why everyone's watching this election.
More from Joel's interview with Lie. When we come back, Joel, we've been talking about how carefully everyone speaks about the relationship between Taiwan and China, and Lie has really pushed those boundaries a little bit. When you talk to him, how did he talk about the relationship between Taiwan and China.
So I think the foundation of Lie's candidacy and what he says in the interview is really about this idea of maintaining the status quo. And because he is this continuity candidate, he's the current vice president, the current president President sign can't run because of term elaments. So he's continuing the DPP's policies, which is basically, we're willing to have a dialogue with Beijing. The door is open, only
Beijing doesn't see it that way. Beijing, as an opening bid to any conversation, would want Taiwan to recognize that it is part of Greater China, and that is a non starter for Lie. And it also speaks to sort of how fractured the rest of this race looks like and what the opposition parties might be willing to do.
And you spoke to Lie about this, and here's what he had to say.
Well, Jensa Tan Senji, this election is about choosing between two roads. One way is to continue engaging and cooperating closely with the international community while deepening our democracy. The other choice is to accept the one China principle and stand together with China. I believe the US will continue to support us on the first path one means.
Will say so lia is talking about, of course, the US, and he believes that US will want him to continue to pass to work with the international community, including the US. While the opposition candidates would probably go down to the other side. They wanted to increase the dialogue and exchanges with China. So the key issue for this presidential election is about how people should decide how Taiwan should deal with China going forward.
Joe, when you spoke to Lie about how he would lead the country, what did he say? What is his platform?
Well, there's a formal answer to that which he's got these four principles that are effectively speak to how he will continue president size policies. I think the foundation, though, is that he really wants to have Taiwan as a democracy.
I have the confidence that if we go on the right path to strengthen our sybil and the nation capability and extend shoulder to shoulder, which democracies, I think we will go through this complicated situation. And I always say peace is our destination. Democracy is our campus. We have two. We have no choice to navigate brevity through this complicated situation.
I mean, he won best Legislator in Taiwan when he was on a more local level. And the foundation of the DPP is this is a democracy, right. So part of how this election is being framed is that Lie says voting for me is voting for democracy. The opposition candidates will say, if you're voting for Lie, you're voting for war. If you're voting for us, you're voting for peace. And so those are sort of the ultimate tensions that are kind of playing out here.
And what does he say about those charges that a vote for him is a vote for war.
He does not want to provoke China full stop. So for him, he wants to be ready to defend and he said that to us. One element of that is that the current administration has extended conscription, which in Taiwan had been four months. So if you're an adult male, you had to do a four month tour of duty
with the military. That's been extended to a year. That's been controversial because it speaks to the fact that Taiwan needs to be able to defend itself and one of the things Life says is we would want the US to come to our back, but we need to be able to defend ourselves.
We don't want to be enemies. We can be throwned and we love to see China can enjoy democracy and freedom just like us as long as Slayo is Parity and dignity, although is always open. We are willing to
cooperate with China to advance peace and prosperity. However, untier China relaunches the force against Taiwan, we must strengthen our military capacity and the stand shoulder to shoulder with democracies to effectively deter the straits from China and to secure stability in the Intero Pacific region.
So Light previously said that to avoid war, Talan has to be prepared for war. So I think people here usually cite soon that's ancient Chinese military strategy, saying that the best strategy would be to stop your enemy from doing anything stupid. So that's why. Not only just Why, but also the KNT and the opposition candidates as well.
They all support the idea that talent should be fat the deterrence so that that could stop China from having the idea to invade Taiwan and also have to let China think twice about a massive consequence they may have should one day they wanted to invade Taiwan.
Joe, We've talked about how Taiwan's chip making capability is one of its most important assets and one of the things that the rest of the world would potentially want to protect if China decided to move in. But TSMC, the big chip maker, is now building plants in the US. Is that considered a good thing or a bad thing for Taiwan's security?
That is a strategic imperative for the US. If all of the world's advanced chip making resides solely in Taiwan and there were an escalation of tensions in Taiwan or just open warfare, the world could be set back years. I mean, we take away these chips, you're living in a world that looks like nineteen eighty two.
Right.
It's a scary thought. It's also really scary for the US military because those advanced chips are what the US would need to power its military. So from a US perspective, it's really important that some of TSMC's operations be on short and as reflected of these fabrication plants fabs that are being built in Arizona. That is sort of an opening bid for perhaps more chip making that could move
out of Taiwan. Already, TSMC has an operation in Japan, they're flirting with Germany, so there's this idea that maybe there could be more chip making outside of Taiwan. Now that becomes really complicated in Taiwan because there's a fear that if all this advanced chip making moves out of Taiwan, would anyone come to Taiwan's aid should tensions escalate in China invade if the chip making isn't happening in Taiwan,
do you need Taiwan? And that is a really really difficult question that is part of this election as well.
Cindy, where do you lie and the other candidates say about this question of exporting ship making capability to other countries.
Yeah, we asked lied about this question during our interview and lie thanks. It's actually a good thing that Taiwan, especially TSMC, could set up its plans overseas because that shows the expansion of Taiwan's economic strengths, and that shows Taiwan's significance and the global tech supply chain, tawand Pan.
Taiwan's semiconductor industry has attracted attention from around the world, but this industry is built on cooperation. For example, in Taiwan, we are focused on IC design, IC production, packaging and testing. Our processes are focused in the manufacturing space. However, our equipment comes from the US, Japan, and the Netherlands. As a result, the semiconductor industry consists of a shared supply chain from across democracies.
Tanye and He also believes that that's Taiwan's responsibility to give back to the international community. So when we ask him during the interview if TSMC is going to set up another plan in the US in the future, will he stopped that? His ansor is literally no, because he thinks that's just a positive development to show the Taiwan's significance to the world.
All of this speaks to an element in the election that you could think of as American skepticism, which is, if chip making moves out of Taiwan, does the US actually have Taiwan's back. The other element that Lie brought up, which I thought was fascinating, was even though the chip making moves to the US. Taiwan has this ecosystem that's been built over decades, and the US doesn't have that
same ecosystem. So those chips that are going to get made in Arizona on behalf of Apple and Nvidia and whoever else, those chips are going to go back to Taiwan and basically be assembled into other things or elsewhere. Right, So it speaks to sure, US might get some chips out of this, but they're going to get made and then ship somewhere else to get assembled into the final product that Americans buy as consumer goods.
Cindy. How do regular people in Taiwan feel about this? Do they think it's a good idea to export chip making?
I think that's really a controversial topic in Taiwan now, and I believe some people saying it's a good idea. It's just like Vice President lies it well. Other people would also agree with the opposition camp's idea that it's probably the US trying to get the chip industry out of Taiwan in case of emergency or conflict, then US probably won't really need to centrop to Taiwan or defend Taiwan and not helping this just a while ago. We see former US President Trump said.
Remember this, Taiwan took smart, brilliant, they took our business away. We should have stopped them, We should have text them, we should have tariffed them.
So that again probably proved to some Taiwanese. I just totally fit into this US skepticism theory that US didn't really try to help Taiwan for its own benefit.
After the break. How do people in Taiwan see the relationship with China, Joe. We've talked about how some people are making comparisons between Russia and Ukraine and China and Taiwan, and that a lot of people see this election is important in part because the next president may have to deal with an escalation of tensions with China. What is Lie's view on what thai No one needs to do if war with China is a real risk.
I think it's imperative that Taiwan and Lie not provoke China, and so that will be the first thing. One of the other people that we talked to was actually the Foreign Minister, and the Foreign Minister said, China likes to draw red lines and bluster, and one of the things that the international community should do is recognize that and
not take that bait. So I think first and foremost it's imperative that lie to keep the status quo, not provoke, but should it happen, He's made clear that Taiwan will defend itself.
When we as lie. During the interview what he learned from the Russian Ukraine War, he acknowledged that talent securities of international concern, and we will not be provocative and try to avoid war as much as possible.
Means democracy is a universal value, irrespective of borders. Residents Lenski rallied his people to resist Russia's invasion. They are protecting not only their country, their land, and their people. They are also fighting on behalf of our democratic values.
I'd also say how tong Jinga or China will collad.
Russia's unprovoked invasion of Ukraine has led us to see that dictatorships are inherently unpredictable. We must make the best preparations for a worst case scenario.
And inn way do.
We also see that Presidents Zelenski's courage, as well as the support they sought internationally, all contributed to Ukraine's resistance against the Russian invasion. We have a deep understanding that we must avoid war in the Taiwan Strait. There are no winners in war. Peace is priceless. From the war in Ukraine, we see that we must do all we can to avoid war in the Taiwan Strait.
Tensen, Cindy, What do you people in Taiwan think about this risk of war? Is this a topic of Kandrus that comes up a lot.
I think on the surface, the lives in Taiwan are pretty normal, just like when Joe visited US week. Took Joe to the night markets and you can see that the night markets are packed with the food vendors and packed with tourists not only from Taiwan but also from around the world. So businesses is very usual in Taiwan. And the other day when I try to book a restaurant, I still need to like there's a long queue for Taiwan's famous thing, Tayphoon restaurant, things like that. So on
the surface, everything looks very normal in Taiwan. But I think under the surface something started to change, especially after the Russian Ukraine war started. I think people here started to realize that war is not impossible. One of my friends, who is from a wealthy family, they're talking about buying passports from some smaller countries, probably like some countries in the Caribbean Sea or even in EU if you invests
a certain amount of money. So that kind of options have take rooted in some Taiwanese people's minds, especially those people from the wealthy families, because they probably have more to lose. They're thinking about contingency plan for themselves and even for their kids. And in the campaign, there are some other issues like a slow in economy, stagnant wages, high housing costs, and repeated delayed in the transition to
renewable energy. But really the tension with China is the biggest issue in the presidential election, so that overshadows everything else.
Does China have a preferred candidate in this race? What do they think of Lie as a possible president of Taiwan.
Certainly China doesn't like Lie, so there was an anodote about Lie. He went to Shanghai in twenty fourteen, and he made really strong comments about Taiwan independence. According to to one of the person who was in Live's delegation at that time, he said Like immediately picked up that question by saying Taiwan independence was the consensus among the Taiwanese people that still vividly remembered by many of us
in Taiwan, and some people in his delegation. Even Jokin said afterwards that they'll worry whether they will be able to leave Shanghai after his comments on Taiwan independence.
Just to understore that significance lies the only Taiwanese politician to make bold statements about Taiwanese independence on Chinese soil. That shows you how much Beijing does not like him.
As to the other opposition candidate, the one that's probably the most China friendly is Terry Gould. That's the founder of Foxhound Technology Group. He hasn't really declared his bid for presidential candidacy yet, but it's widely suspected that he
probably will do that. And the reason why he is the most China friendly one is because he has said an an opinion piece to the Washington Post that he called for Taiwan to immediately start a talk with China under the One China Framework, and he also blamed current leader the President Taie and Vice President Lie for bringing
Taiwan to the brink of war. So people expected that Perry Will would declare his bid for the presidential candidate as an independent, and if that's true within opposition split among three candidates, that's probably going to increase Vice present lives chance as a presidential candidate, Joe.
So where do things go from here?
So the election is going to actually be in January, so we have several months for this to play out, and then once we know who's won the election, the new president actually won't take office until May, so we have a lot of time. But it does speak to also the turbulence of Taiwanese politics. The last election, the current president side was not in the lead and then dramatically took over the lead and won in a landslide.
So while Lie is currently ahead in the polls, it's an election and anything can happen.
One thing to remember though, Lie currently has a support rating of under forty, so that means at least sixty percent of people who are not supportive of Lie. So if there is any way that a position campaign they can try to consolidate behind one candidate, then that could be the only way that they could lead over Vice Present Lie beat him and be elected next January.
A way to think about what unfolds over the next couple months is you've got Lie who's a former kidney doctor, the TPP candidate, former surgeon. You've got the KMT candidate who's a former detective, and then you've got Fox con founder Terry Woe, who's a billionaire. So you've got a doctor, a surgeon, a detective, and a billionaire walking into an election. Who wins. The world is going to be watching this
election come January. Obviously Taiwan's invested in this outcome. Beijing is watching it, the US is watching it, Europe's watching it. The global economy might hinge in the balance of who's elected president, So the stakes for this election could not be higher.
Joel Cindy, thanks so much for speaking with me, Thanks for having us, Thanks for listening to us here at The Big Take. It's a daily podcast from Bloomberg and iHeartRadio. For more shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen. And we'd love to to hear from you. Email us questions or comments to Big Take at Bloomberg dot net. The supervising producer of The Big Take is Vicky Virgalina. Our Senior producer is Katherine Fink.
Our producers are Michael Falero and Moberrow. Philde Garcia is our engineer, with additional production support from Nielli, Haramio Plata and Jill Namazzi. Our original music was composed by Leo Sidrin. I'm West Kasova. We'll be back tomorrow with another big take.