DPP’s electoral victory comes at a crucial time when the United States (US)-China relations are at an all-time low and are on a freefall. Over past few weeks, China has not only expressed its displeasure over DPP’s stand on the cross-strait relations but has also warned Taiwan of consequences should the latter try to defy the 1992 consensus.

The DPP electoral victory is not only likely to embolden Taiwan’s foreign policy priorities but will also have long-term implications on both cross-strait relations and consequently – the US-China dynamics. Taiwan’s New Southbound policy, which is seen as its flagship initiative to engage the Indo-Pacific countries especially Southeast and South Asian countries along with Australia and New Zealand, might get sturdier and more action-oriented. The level of support it receives from other countries in the region may change accordingly.

It will not be to China's advantage if Taiwan gains more self-assurance in its political and strategic capabilities. In other words, the foremost implication of the DPP electoral victory will lead to spiking up of cross-strait tensions even though Beijing has remained somewhat restrained. The general narrative and political choices pertaining to the Taiwan Strait will also be influenced by the opinions and responses of the people in the US, China, and Taiwan.

A direct implication of the election result would be Taiwan’s reinvigorated attempt to secure more international recognition, which could elevate its standing at the global stage. However, considering China’s aggressive move to take Taiwan’s friends into its own camp, the William Lai government has an uphill task on this front.

While it will serve Taipei well to elevate its profile in the Indo-Pacific and elsewhere to build stronger ties with like-minded countries, it may have to be mindful of the fragility of its ties with China. The new government in Taiwan must balance its pro-independence stance with caution while also keeping channels for conciliatory steps to ease tensions with China.

Having a strong backup strategy to deal with a hostile China on the economic front is necessary as it is trade, investment, and technological linkages where China is still Taiwan’s biggest partner. As per the US Department of Commerce, in 2022 “China was Taiwan’s largest trading partner, accounting for 22.6% of total trade and 19.6% of Taiwan’s imports.”

DPP’s electoral victory is certainly good news for the US-Taiwan relations. It may be noted that despite maintaining unofficial relations with Taiwan, the US has been the principal and most-reliable security provider to Taiwan. Moreover, the Taiwan Relations Act, 197 makes it incumbent upon the US to “provide Taiwan with arms of a defensive character; and to maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardise the security, or the social or economic system, of the people on Taiwan.” The election outcome will impact the nature and extent of the US-Taiwan diplomatic, economic, and security ties, moving the two partners in a stronger embrace.

At the systemic level, however, tensions are likely to flare up between the two superpowers – China and the US. For China, Taiwan is a core issue and anything going against the policies and perceptions of President Xi Jinping’s China will only deteriorate its relations with Washington – the chances of which are on an all-time high now. Coming months and years are likely to witness a more stressed China-US relations marked by an element of unpredictability. Increased tensions could lead to a more assertive military presence and escalations from both sides.

A logical extension of the US-China-Taiwan dynamics will consequently have implications on regional strategic equilibriums in East, Northeast, and Southeast Asia as well. For the US allies in Northeast Asia – Japan and South Korea, which also have stakes in cross-strait relations, - this could lead to more strategic anxieties. Japan has alluded to such concerns in its recent Defence White Papers. Major Indo-Pacific stakeholders - India, Japan, Australia, and South Korea, may closely watch and respond to developments in the Taiwan Strait.

A lot will depend on the deft with which Taipei takes its calculated strategic risks.

This article is authored by Rahul Mishra, associate professor, Centre for Indo-Pacific Studies, School of International Studies, JNU.