For once, the "China factor" was not the focal issue in the electoral debates in the run-up to the "three-in-one" elections held December 3.
Nevertheless, the relatively minor direct role played by cross-strait relations issues in the campaign does not mean that the current nature of the "China factor" in Taiwan politics was not conducive to the win scored by the Kuomintang against the governing Democratic Progressive Party in the polls.
After several consecutive bitter experiences of counterproductive interventions, Beijing kept a low profile in the "three-in-one" election campaign and thus helped reduce the weight of the "China factor" as a plus for the pan-green camp.
However, as shown by calls to "oppose the Chinese Communists and protect Taiwan," both the DPP and the Taiwan Solidarity Union evidently failed to take adequate note of this shift, even though the signs of a shift in PRC tactics was visible in the December 2004 Legislative Yuan election campaign.
In last December's polls, the pan-blue camp of the KMT and the People First Party won a narrow majority even though the pan-blue parties were notorious for their endless boycott of the DPP administration of President Chen Shui-bian in the wake of the DPP incumbent's narrow victory in the March 2004 presidential election.
Similarly, one of the major factors behind the pan-green's failure to win a majority in last December's legislative polls and the DPP's setback in the elections December 3 was clearly disappointment with the economic performance under the DPP government.
The DPP has borne the brunt of incessant criticism for its failure to revive Taiwan's sluggish economy, especially from business leaders with investments in China and, hypocritically, the pan-blue parties which have used their legislative majority to block numerous government initiatives to bolster our economic systems and infrastructure.
Many businessmen, regardless of their political stripe, see the KMT, which has always been closely tied with industrial and commercial sectors, as offering a more friendly framework to support their business operations in China.
President Chen has been trying to maintain a middle course between the need to accommodate to the reality of China's growing global economic clout and the no less pressing need to reaffirm and defend Taiwan's sovereignty and independence and democratic political system and keep Taiwan from becoming another Hong Kong.
However, Chen's versatility and frequent policy changes, largely in response to external as well as domestic pressures, has made businesspeople uncomfortable and predisposed to accept the distortions of the conservative media and pan-blue camp that the DPP is both "anti-China" and "anti-business."
The fact that no one has been satisfied is shown by the continued disputes over the policy of "active opening and effective management" adopted by the first Economic Development Advisory Conference in August 2001.
Although this policy aimed to strike a balance between the needs of economic openness and overall national security, the DPP government has come under fierce criticism for paying too much attention to reigning the degree of the "active opening" and neglecting the strengthening of "effective management."
The DPP government is seen by business leaders as a barrier, not a supporter, of the expansion of Taiwanese overseas investment in China and the existence of this perception and resulting tension between the DPP government and the business sector provides fertile ground for the PRC's efforts to use the economy to pressure the Taiwan government, as Beijing did in Hong Kong.
It is also quite obvious that the cognitive gaps between businesspeople and the DPP government have gradually widened during this period, even if the fault does not entirely lie with the DPP.
DPP leaders certainly need to work hard to deepen their understanding of economic as well as political realities in China to lower the existing barriers for Taiwanese businesspersons, even those with pan-green sentiments, to share their experience and thoughts with the DPP leadership.
Assess the risks
Moreover, it is important to acknowledge that the risk assessments of Taiwanese businesspeople and the DPP government are quite different.
Many Taiwanese investors, businesspersons or managers active in China believe that the DPP government has a responsibility to find realistic and pragmatic solutions for the problems faced by the thousands of Taiwanese businesses in the PRC and the hundreds of thousands of Taiwanese citizens who regularly live and work in China.
For its part, the DPP administration sees itself as the democratically elected government of all Taiwan citizens, not just of businesspersons or of people who choose to invest or work in a high-risk environment such as the PRC.
Moreover, the precondition imposed by the PRC regime of even holding consultations with the Taiwan government on resolving problems in the Taiwan-China relationship is prior acceptance of Beijing's "one China principle."
Agreement to such a condition by the Taiwan government would not only be a compromise by the DPP itself but also endanger the democratic rights, national security and even economic prosperity of all Taiwan citizens.
Ironically, the underlying reason why Beijing offers attractive concessions to Taiwanese businesses in China is precisely the fact that Taiwan is and remains independent from the PRC. Both the DPP government and Taiwanese businesspeople need to improve efforts to build a common language, in part by putting themselves in the other's place.
If the DPP is going to reassert political influence in the run-up to the March 2008 presidential election, its must manifest more economic leadership by both pragmatically dealing with the the "China factor," by resolutely promoting a feasible path of sustained and sustainable development, and by explaining clearly to the electorate why unconditional liberalization of cross-strait links, as pushed for by the pan-blue camp, would undermine Taiwan's long-term competitiveness.