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And maybe a fiscal one, too. And no, it has nothing to do with China.
December 20, 2024: When the cameras roll, the shoving begins...The DPP party caucus tries and fails to blockade the speaker's podium to prevent a final vote on three controversial bills. / Taipei Times
On December 20, amid shouting, shoving, fistfights, and broken furniture, Taiwan’s opposition-controlled legislature passed by a show of hands three controversial bills that threaten to kneecap its government. The first raised the threshold to recall elected officials. The second required the Constitutional Court to have a 2/3 quorum to hear constitutional cases and imposed a supermajority threshold to invalidate a law. And the third shifted the central-local revenue-sharing formula to give local governments (mostly KMT-run) 40 percent of all government revenues, up from 25 percent, at the expense of the DPP-run central government.
Four days later, the same opposition majority in the legislature voted down all seven of President Lai’s nominees to the Constitutional Court, leaving it with only eight justices and unable to meet the new quorum requirement for hearing a case. It is now effectively paralyzed. The DPP government has nevertheless requested that the court meet and rule anyway on whether the amendments to the Constitutional Court Act are themselves unconstitutional. This increasingly destructive partisan political conflict has put Taiwan on the brink of a constitutional crisis with no obvious way to resolve it.
This confrontation is also taking place in a democracy that Freedom House last year ranked as the second-best in Asia, behind only Japan, and significantly above the United States and most of Europe. Taiwan's political system has proven remarkably resilient to PRC influence operations over many years, and it has a capable and effective state and vibrant economy despite its diplomatic isolation. So why is it facing a political crisis now?
Four days later, the same opposition majority in the legislature voted down all seven of President Lai’s nominees to the Constitutional Court, leaving it with only eight justices and unable to meet the new quorum requirement for hearing a case. It is now effectively paralyzed. The DPP government has nevertheless requested that the court meet and rule anyway on whether the amendments to the Constitutional Court Act are themselves unconstitutional. This increasingly destructive partisan political conflict has put Taiwan on the brink of a constitutional crisis with no obvious way to resolve it.
This confrontation is also taking place in a democracy that Freedom House last year ranked as the second-best in Asia, behind only Japan, and significantly above the United States and most of Europe. Taiwan's political system has proven remarkably resilient to PRC influence operations over many years, and it has a capable and effective state and vibrant economy despite its diplomatic isolation. So why is it facing a political crisis now?
A Divided Legislature and a Missed Opportunity
February 1, 2024: Han Kuo-yu and Johnny Chiang celebrate winning both the speaker and deputy speaker positions with other KMT legislators, including Fu Kun-chi. / CNA
The simplest answer is divided government. For the first time in 16 years (and only the second time in its democratic history), Taiwan's legislative and executive branches are controlled by different parties: the Chinese Nationalist Party or Kuomintang (KMT) and Taiwan People's Party (TPP) together hold a majority in the Legislative Yuan, and they are locked in a fierce power struggle with the Democratic Progressive Party (DPP) government.
This conflict was not inevitable. In the January 2024 presidential and legislative elections, the DPP's Lai Ching-te (賴清德) won the presidential election but with only 40% of the vote, and the DPP lost its majority in the legislature. The KMT ended up with 52 seats (plus two blue-leaning independents), the DPP won 51, and presidential candidate Ko Wen-je's (柯文哲) centrist TPP won eight (all via the party list vote). That left no party with a majority and made the TPP the crucial swing voting bloc in the LY. In theory, the TPP could have exploited that leverage to extract significant concessions from the ruling DPP -- on policy, legislative leadership, or cabinet positions. But instead, negotiations between the DPP and TPP went nowhere, and President Lai missed his chance to head off the last year of partisan warfare.
The formation of battle lines first became apparent on February 1, when the new legislature was seated. Its first order of business was to elect a speaker and deputy speaker. Curiously, the TPP ultimately decided not to support either of the major party nominees -- the party's eight legislators voted for TPP member Huang Shan-shan (黃珊珊) in the first round, and abstained in the second. As a result, the KMT's Han Kuo-yu (韓國瑜) won the speaker's race, and KMT legislator Johnny Chiang (江啟臣) was elected as his deputy. Despite providing crucial help to the KMT, the TPP did not manage to win even the deputy speaker as the price for their support. Nor did they strike a deal with the DPP, either, although that should have secured at least one of the leadership positions for the party. Given that the TPP held the crucial votes that could have denied control of the legislature to either major party, this outcome seems like a major missed opportunity for both them and the DPP.
I've heard competing explanations for this bargaining failure. One story is that the refusal came from the DPP side -- ruling party legislators were engaged in quiet conversations with the TPP about a possible power-sharing deal, but Lai Ching-te intervened to stop the negotiations. Reporting at the time suggested that the TPP's price for cooperation in the run-up to February 1 was for the DPP to support Huang Shan-shan for speaker -- a price the DPP was apparently not willing to pay, but which in hindsight they probably should have. That interpretation is also consistent with the public comments offered by party caucus whip Ker Chien-ming (柯建銘) that "A DPP-TPP partnership is only possible if the TPP voluntarily comes to us."So maybe this was a strategic mistake by the DPP caucus (and ultimately, Lai himself), and they are suffering the consequences.
But another possibility is that the TPP was just never seriously interested in cooperating with the DPP no matter what they offered -- even before Ko Wen-je's detention in a corruption investigation several months later turbocharged the TPP's animosity toward the DPP government. Although the KMT-TPP negotiations for a joint presidential ticket broke down in spectacular public fashion in November 2023, the two parties did still enter into a pre-election coalition for the legislative races and even campaigned together, so perhaps TPP leaders had already made up their minds to team up with the KMT after the elections, too, and there really was no chance the DPP could have enticed them to defect.
Whatever the reason, ever since the new legislature was seated on February 1, the TPP has consistently chosen to act as the KMT's junior partner and supported the opposition party's confrontational approach to the DPP government. And as the partisan divide has hardened, it has also transformed into an inter-branch conflict between the KMT-TPP majority in the legislature and the DPP in the executive. The partisan maneuvering that has followed has escalated over the last year to a level of open political warfare that is posing a severe test for Taiwan's democratic institutions. And it is a test they are failing.
This conflict was not inevitable. In the January 2024 presidential and legislative elections, the DPP's Lai Ching-te (賴清德) won the presidential election but with only 40% of the vote, and the DPP lost its majority in the legislature. The KMT ended up with 52 seats (plus two blue-leaning independents), the DPP won 51, and presidential candidate Ko Wen-je's (柯文哲) centrist TPP won eight (all via the party list vote). That left no party with a majority and made the TPP the crucial swing voting bloc in the LY. In theory, the TPP could have exploited that leverage to extract significant concessions from the ruling DPP -- on policy, legislative leadership, or cabinet positions. But instead, negotiations between the DPP and TPP went nowhere, and President Lai missed his chance to head off the last year of partisan warfare.
The formation of battle lines first became apparent on February 1, when the new legislature was seated. Its first order of business was to elect a speaker and deputy speaker. Curiously, the TPP ultimately decided not to support either of the major party nominees -- the party's eight legislators voted for TPP member Huang Shan-shan (黃珊珊) in the first round, and abstained in the second. As a result, the KMT's Han Kuo-yu (韓國瑜) won the speaker's race, and KMT legislator Johnny Chiang (江啟臣) was elected as his deputy. Despite providing crucial help to the KMT, the TPP did not manage to win even the deputy speaker as the price for their support. Nor did they strike a deal with the DPP, either, although that should have secured at least one of the leadership positions for the party. Given that the TPP held the crucial votes that could have denied control of the legislature to either major party, this outcome seems like a major missed opportunity for both them and the DPP.
I've heard competing explanations for this bargaining failure. One story is that the refusal came from the DPP side -- ruling party legislators were engaged in quiet conversations with the TPP about a possible power-sharing deal, but Lai Ching-te intervened to stop the negotiations. Reporting at the time suggested that the TPP's price for cooperation in the run-up to February 1 was for the DPP to support Huang Shan-shan for speaker -- a price the DPP was apparently not willing to pay, but which in hindsight they probably should have. That interpretation is also consistent with the public comments offered by party caucus whip Ker Chien-ming (柯建銘) that "A DPP-TPP partnership is only possible if the TPP voluntarily comes to us."So maybe this was a strategic mistake by the DPP caucus (and ultimately, Lai himself), and they are suffering the consequences.
But another possibility is that the TPP was just never seriously interested in cooperating with the DPP no matter what they offered -- even before Ko Wen-je's detention in a corruption investigation several months later turbocharged the TPP's animosity toward the DPP government. Although the KMT-TPP negotiations for a joint presidential ticket broke down in spectacular public fashion in November 2023, the two parties did still enter into a pre-election coalition for the legislative races and even campaigned together, so perhaps TPP leaders had already made up their minds to team up with the KMT after the elections, too, and there really was no chance the DPP could have enticed them to defect.
Whatever the reason, ever since the new legislature was seated on February 1, the TPP has consistently chosen to act as the KMT's junior partner and supported the opposition party's confrontational approach to the DPP government. And as the partisan divide has hardened, it has also transformed into an inter-branch conflict between the KMT-TPP majority in the legislature and the DPP in the executive. The partisan maneuvering that has followed has escalated over the last year to a level of open political warfare that is posing a severe test for Taiwan's democratic institutions. And it is a test they are failing.
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The Hoover Institution Project on Taiwan in the Indo-Pacific Region and the Program on the US, China, and the World invite you to Guardians of Economic Sovereignty: How Taiwan and Singapore Navigate Chinese Capital Through National Security Review.
This event is free and open to the public. It will be held at the Hoover Institution in HHMB 160 on Wednesday, January 16 from 4:00-5:15pm. Register to attend in person or virtually.
Professor Chen will discuss two distinct strategies for scrutinizing outbound investment from China, as adopted by Taiwan and Singapore—both key trade partners of China. Growing concerns over Chinese investment have led to stricter national security reviews worldwide, yet the actual enforcement of these reviews remains understudied, particularly outside the U.S. context. He contrasts Singapore's reliance on ex post monitoring with Taiwan's emphasis on ex ante screening. Additionally, he highlights how Singapore leverages privatized monitoring to reinforce investment scrutiny, while Taiwan incorporates elements of private enforcement. The discussion underscores the importance of utilizing market intermediaries as enforcement agents, serving as a crucial supplement to the traditional framework of national security reviews. Both cases demonstrate how the private sector can take a proactive role in enforcing national security reviews.
This event is free and open to the public. It will be held at the Hoover Institution in HHMB 160 on Wednesday, January 16 from 4:00-5:15pm. Register to attend in person or virtually.
Professor Chen will discuss two distinct strategies for scrutinizing outbound investment from China, as adopted by Taiwan and Singapore—both key trade partners of China. Growing concerns over Chinese investment have led to stricter national security reviews worldwide, yet the actual enforcement of these reviews remains understudied, particularly outside the U.S. context. He contrasts Singapore's reliance on ex post monitoring with Taiwan's emphasis on ex ante screening. Additionally, he highlights how Singapore leverages privatized monitoring to reinforce investment scrutiny, while Taiwan incorporates elements of private enforcement. The discussion underscores the importance of utilizing market intermediaries as enforcement agents, serving as a crucial supplement to the traditional framework of national security reviews. Both cases demonstrate how the private sector can take a proactive role in enforcing national security reviews.
Speaker Bio
Weitseng Chen is a faculty member at the National University of Singapore Faculty of Law, specializing in law and economic development, law and politics, and legal history in the context of Greater China. He has recently published several books, including Regime Type and Beyond: The Transformation of Police in Asia (CUP, 2023), Authoritarian Legality in Asia: Formation, Development and Transition (CUP, 2019), The Beijing Consensus? How China Has Changed the Western Ideas of Law and Economic Development (CUP, 2017), Property and Trust Law: Taiwan (with Yun-Chien Chang & Y. J. Wu, Kluwer, 2017), and Law and Economic Miracle: Interaction Between Taiwan’s Development and Economic Laws After WWII (in Chinese, 2000). Weitseng Chen earned his JSD from Yale Law School. Prior to joining NUS, he served as a Hewlett Fellow at Stanford’s Center for Democracy, Development, and the Rule of Law (CDDRL) and practiced as a corporate lawyer in the Greater China region with Davis Polk & Wardwell.
Weitseng Chen is a faculty member at the National University of Singapore Faculty of Law, specializing in law and economic development, law and politics, and legal history in the context of Greater China. He has recently published several books, including Regime Type and Beyond: The Transformation of Police in Asia (CUP, 2023), Authoritarian Legality in Asia: Formation, Development and Transition (CUP, 2019), The Beijing Consensus? How China Has Changed the Western Ideas of Law and Economic Development (CUP, 2017), Property and Trust Law: Taiwan (with Yun-Chien Chang & Y. J. Wu, Kluwer, 2017), and Law and Economic Miracle: Interaction Between Taiwan’s Development and Economic Laws After WWII (in Chinese, 2000). Weitseng Chen earned his JSD from Yale Law School. Prior to joining NUS, he served as a Hewlett Fellow at Stanford’s Center for Democracy, Development, and the Rule of Law (CDDRL) and practiced as a corporate lawyer in the Greater China region with Davis Polk & Wardwell.