Aside from China, trade, identity, pork are big issues in Taiwan election

Taiwan's general election on Saturday has Beijing on edge, with the pro-independence DPP expected to easily win the leadership race as well as the concurrent parliamentary election.

But there are other, less high-profile topics voters are equally focused on, including trade, technology and the Taiwanese national identity.

Here are the hot button issues in this small but feisty democracy.

The cross-straits relationship

For the global community, the outcome of the polls is a determiner for Taiwan's amorphous relationship with China, which views the territory as a renegade province that can be re-taken by force if necessary.

China and Taiwan parted ways in 1949, when the Nationalist Party (KMT) was forced to retreat to Taiwan by the Chinese Communist Party. No armistice or peace treaty has ever been signed.

While the strained relations between the two has always been viewed to be a geopolitical risk, KMT historically holds the view that the two sides will unify ... sometime. Ties between the two have also improved over the past eight years under the leadership of current president Ma Ying-jeou, with a slate of trade and economic agreements signed.

Even though the DPP's presidential candidate has said she will not upset the status quo, a new party in power will inject uncertainty not just between the neighbors, but also into Taiwan's export-reliant economy.

"The question is whether a [Democratic Progressive Party] government and Beijing is able to create a new political framework that maintains stability across the Taiwan Strait," said Evan Medeiros, managing director and Asia practice head at consultancy Eurasia Group.

The U.S. is watching the poll warily and is already expected to send envoys to both Beijing and Taiwan after the election to smooth things over.

Bill Stanton, the former director of the American Institute in Taiwan (the de facto U.S. embassy), told CNBC that Washington was concerned about an imminent DPP win and would urge both sides to keep the peace in the region.

Concerns about the economy

As in most democratic elections, local bread and butter issues are on the top of the agenda for Taiwanese voters.

Mirroring neighboring Hong Kong, many Taiwanese businesses have benefited from their geographical and cultural proximity to China, pouring investment into the mainland and reaping enviable profits as upwardly mobile Chinese trudge into Taiwan to work and play.

But this creates problems at home in the form of a changing labor landscape and inflation amid a decline in real wages.

And in recent years, Taiwan's export-driven economy has been in the doldrums due to slowing growth in China, its key trading partner China.

DPP candidate Tsai Ing-wen, who looks almost certain to be Taiwan's next leader, has promised to promote the territory's technology industry, which has been threatened by China's increasingly competitive supply chain and aggressive price cutting.

KMT candidate Eric Chu, meanwhile, hopes to score points by promoting the party's close ties with Beijing, which could continue to benefit Taiwan.

It's unclear if political changes will have any impact on Taiwan's economy, even though a DPP victory "would undoubtedly send a shudder through parts of Taiwan's business community," said London-based Capital Economics in a note.

Trade partnerships, and pork

Supporters at Taiwan's main opposition Democratic Progressive Party (DPP) hold up piggy banks at a party fundraiser in Taipei.
Sam Yeh | AFP | Getty Images
Supporters at Taiwan's main opposition Democratic Progressive Party (DPP) hold up piggy banks at a party fundraiser in Taipei.

Diplomatically isolated due to the mainland's "One China" policy that forces countries to take sides, Taiwan is jostling to join the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership trade pacts.

The bid to join the U.S.-led TPP is proving to be a sticking point in the election campaign because Taiwan currently has a ban on American pork laced with ractopamine, a U.S. Food and Drug Administration-approved leanness enhancer. This ban may have to come off should Taiwan makes a bid to join the TPP.

But pig farmers, who clock substantial production value in the Taiwanese agriculture sector, are furious at prospect of an influx of U.S. pork onto the market, and there are the concerns about food safety — even before any negotiations have started.

Taiwan's agriculture minister has said that Taiwan cannot follow Japan's and Korea's pork import standards as Taiwan's average consumption of the meat is far higher than in the two neighboring countries.

Taiwanese identity

Despite their close cultural roots with China, people in Taiwan increasingly identify themselves as Taiwanese rather than Chinese, the result of several decades of separation from the mainland.

And young Taiwanese who grew up in a lively democracy - unlike their parents, who lived under decades of martial law - are increasingly disengaged from communist China, particularly after the mainland government was seen to be interfering in how autonomously-ruled Hong Kong chooses its leaders, events that prompted widespread street protests in Hong Kong in 2014.

Beijing was seen as attempting to influence Taiwanese elections with a historic meeting between Ma and president Xi Jinping in November, and by allowing Chinese passengers to transit through Taiwan for the first time just days ahead of Saturday's election. Until the trial announced last week, Chinese travelers were not permitted to travel on to third countries via Taiwan.

The DPP's Tsai has been quick to leverage voter discontent and the rise of a Taiwanese identity to her benefit as she proclaims a firm belief in Taiwan's separate identity from China.

The youth vote

Young people are seen as key to this election, as the disenchanted demography has little historical memory of China and view closer ties with Beijing as just further benefiting the business elite in both territories.

Campus activism has been on the rise, culminating in the Sunflower Movement of 2014 when hundreds of student activists occupied parliament in Taipei for 24 days to protest a trade pact with the mainland.

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