Tough economic challenges await Taiwan president-elect

Significance The election in January of Lai Ching-te as president signalled continuity in economic policy, and economic pressure from Beijing has to date had limited effect. However, Lai faces slowing economic growth and political challenges that will impact Taiwan's future prospects. Impacts Income inequality will grow if Taiwan fails to diversify its economy away from chips and finance enough social welfare. Slowing growth and elderly care expenses could in the long-term undermine Taiwan’s ability to fund a strong military. A stagnating economy would give the pro-Beijing opposition Kuomintang a chance to win the next presidential election. Growing inbound tourism, if it continues, will help boost domestic consumption. Taiwan’s economic ties with China will continue to fade due to the deadlock in their political relations.