President Chen Shui-bian saw in the new year by giving a public speech; his new year speech is a couple of notches less important than his Double-10 National Day speech (which is again a few notches below his inauguration speech). Since it was his first major speech since last month’s local elections, many observers were expecting a major change in policy as a reaction to the DPP’s poor showing – Chen will have disappointed them [*]. The speech was his usual mixture of righteous defense of Taiwan’s sovereignty combined with a few policy announcements which were completely overlooked by the international media [**].

The standard bit

I don’t think I’ve ever seen a speech by Chen which hasn’t praised Taiwan’s achievements, mentioned the importance of forming a national identity, the need for constitutional reform, asserted its sovereignty and mentioned the threat from across the water.

The sovereignty of Taiwan is vested in its 23 million people, and is not subject to the jurisdiction of the People’s Republic of China. Only the 23 million people of Taiwan have the right to decide Taiwan’s future.

Of course, each time he says something like this, all the international reporters go running off to get a quote from Beijing (or if they can’t be bothered to do that, preface it with “in a move which is sure to anger Beijing …”) while ignoring the fact that a) It’s been said about 30 times before in the last 5 years, b) It was wholly predictable that he would say this, c) It’s a (mild) statement of the position that Chen was elected to uphold, and d) it’s blindingly obvious to anyone with the most cursory knowledge of the island. At least it makes life easy for all those journalists: if you can write 90% of your article before the speech is given, you’re not going to have any trouble hitting your deadline.

The new bits

Chen’s speech did touch on bits which, while hardly groundbreaking, will have an effect on the people of Taiwan – needless to say, these bits went completely unreported.

• The biggest news from the speech was the decision to hold a second Economic Development Advisory Conference [***]. The first EDAC was held in 2001 and resulted in a big liberalization of cross-strait economic policy. Partisans from both sides of the political spectrum actually worked together along with economic experts and representatives from most areas of industry to agree on a set of economic reforms which replaced the KMT’s “Go slow, be patient” policy on links with China with a more open “active opening, effective management” policy. The 2nd of these conferences will include an equivalently wide range of participants and is a positive move from a president who is currently being criticized from all sides for making decisions unilaterally and without consultation. The only worrying aspect is that the new policy will be called “effective opening, active management” which implies the government wants to stick its fingers in as many places as possible.
• He mentioned the reform to income tax which starts this year, which put more of the burden of taxation on companies rather than individuals. Many companies (in particular in the high-tech field) got huge tax breaks when they were trying to develop Taiwan’s industry. Those tax breaks are now less justified for established industries and are being reduced.
• There are ongoing attempts to change the pension system in Taiwan. This is needed, but is unfortunately a political hot potato; retired military personnel and teachers are huge beneficiaries of the current pension system due to the fact that these were the standard jobs of KMT stalwarts. The KMT can be guaranteed to fight to defend these perks.

Who was he talking to?

Many intelligent commentators (e.g. Peking Duck, Michael Turton) noted that his speech was not very conciliatory (either to China or to the KMT) – but neglected to mention the most obvious reason for this. The target audience for this speech wasn’t the international community. It wasn’t China. It wasn’t even all those disillusioned Taiwanese voters who voted KMT recently. It was the loyal DPP members who will be voting for a new DPP Chairman in just under a fortnight.

Chen’s popularity with DPP members started to go downhill when he made conciliatory noises to China and the opposition. He was criticized for his attempts to work around the “One China” impasse (talks in the ‘spirit of the 1992’ meetings), was criticized for meeting with James Soong, and was criticized for his mild reaction to the Lien/Soong visits to China. If he wants to win back the support of the average voting DPP member, then he knows he’s got to revert to the sort of rhetoric he normally reserves for national elections. Hence this speech.

Of course, Chen isn’t running for DPP Chairman but ‘his’ man Yu Shyi-kun (游錫堃) is, and is only likely to win if his relationship with Chen is seen as an asset rather than a liability. I suspect, Yu’s chances of winning have improved after this speech. If you consider this speech to be a rallying call to the DPP faithful, it gives it a whole new perspective. This speech was never going to be about the recent local elections – it was about the upcoming DPP elections. Remember: it’s not the last election that’s important – it’s the next election.

* Allow me to be a little bit smug that I predicted there would be absolutely no affect on national policy from the local elections the day after the election.
** This happens with every speech by Chen. Given the option between running a headline of “Chen asserts Taiwan’s independence” or “Chen announces changes to income tax laws”, you know which one everyone will run with.
*** This is not strictly speaking ‘new’ news, since Chen had been talking about this for a couple of months. It was however his first announcement of it in a major speech.