What Chen's Victory Means for Taiwan

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As the post-election riots in the streets of Taipei subside, the Taiwanese are looking around and noticing one remarkable thing: life goes on. Concerns that China would make good on its promise to attack the island if Democratic Progressive Party candidate Chen Shui-bian won the presidential election Saturday have been allayed — for now. And so Beijing and Taipei have locked in a holding pattern: Chen maintains that his country is sovereign, while Chinese President Jiang Zemin holds (as does the U.S.) that Taiwan is a subset of China. As if to confirm that state of affairs, Chen, speaking in a post-victory speech in Mandarin as a seeming display of respect to China, said he wouldn't hold a national referendum on declaring Taiwanese sovereignty. Meanwhile, Beijing refrained from military action, and issued a statement saying it would take a "wait and see approach" to Chen's policies.

Chen, who only garnered 39 percent of the vote, probably needs to take a wait-and-see approach as well. Chen's victory, which displaced the only ruling party Taiwan has ever known, was a product of timing — he was able to capitalize on a schism that emerged in the Nationalist party in the months before the election. What's more, concerns about a Chinese attack were softened by the fact that Beijing hopes to win both permanent Most Favored Nation status with the U.S. and membership into the WTO in the coming weeks, and is leery of any acts that might upset those initiatives.

To make his autonomy agenda a reality, Chen is now faced with the twofold challenge of maintaining the country's economic prosperity while holding China at bay. Most of the country is still more concerned with peace and safety than political autonomy and will quickly defect to the Nationalists if a threat of aggression becomes real. What's more, investors both within and without Taiwan trust the Nationalists' economic stewardship. Many Taiwanese may love the concept of autonomy, but will still take a silent relationship with China over jeopardizing their economic and physical safety.