The DPP’s William Lai prevailed after a competitive three-way race for the presidency, but his party’s loss of a legislative majority has produced a divided government.
China will likely maintain a hawkish stance given the results, but we expect no drastic moves given Beijing’s other domestic and foreign policy challenges.
Lai enters office with a full in-tray, having to bolster Taiwan’s security relationships with Washington and other allies, in addition to domestic issues on energy and demographics.