Next week, the people of Taiwan will gather to vote for a new president. This is arguably the most important election in Asia this year and the outcome will have significant implications for international relations, markets and the economy.
On January 13 next week, Taiwan will hold its eighth presidential election. This is expected to be the most important election in the Asia Pacific region this year due to the geopolitical implications involved, especially regarding US-China relations.
The key issue in this election is the cross-strait relations between Taiwan and China. Taiwan claims to be a self-ruled nation while China does not recognize this status and, instead, claims sovereignty over what it considers to be a rogue province.
Three Presidential Candidates
Beijing has vowed to unify the two and has not ruled out the use of force. Washington has said it would defend Taiwan in the event of a Chinese invasion.
Currently, there are three presidential candidates: Lai Ching-te, vice president of the ruling Democratic Progressive Party (DPP); Kuomintang (KMT) nominee and New Taipei mayor Hou Yu-ih; as well as Taiwan People’s Party (TPP) leader Ko Wen-je.
«Negative Surprises»
According to UBS, election outcomes in 2024 are one of the «potentially underappreciated risks» for investors.
«Multiple elections in 2024 could lead to negative surprises. The outcome of Taiwan’s 2024 presidential election could have significant ramifications for US-China relations and regional security,» the bank said in an investment note.
Major Election Year
This is a major year not only for voters in Taiwan. Countries accounting for more than 40 percent of the world's population and GDP are heading to the ballots in 2024, including the US presidential election in November.
«[W]e would remain on watch for any outside shocks. Geopolitics is one potential risk, especially given 2024 is likely to experience an unusually busy election calendar worldwide,» said Standard Chartered in a recent report. «Our focus would continue to be on whether geopolitical risks hold the potential to cause a lasting shock to asset prices, or just trigger short-lived volatility.»
Lot of Discussions
«There are a lot of discussions on geopolitics. Every client meeting literally has this,» said Deutsche Bank CIO Christian Nolting, who also named the Taiwanese presidential race as an event the bank is closely monitoring. «Interestingly, it’s probably the biggest election year in history.»
