Wires, financial markets show their bias

On the road to next January, not only will the DPP face a tough battle convincing the electorate that it is suited for the job, it will also have to conjugate with institutional biases working against it

In its “Key political risks to watch in Taiwan” fact box on May 3, Reuters, if perhaps unwittingly, highlighted the handicap that the Democratic Progressive Party (DPP and its candidate, Chairperson Tsai Ing-wen (蔡英文), will be facing in next year’s presidential election. Discussing the candidates’ likely electoral platforms, Reuters writes:

President Ma Ying-jeou (馬英九) of the Chinese Nationalist Party (KMT) will run for a second term, touting the success of his pro-China economic policy … A clear victory for Ma is the most favored outcome in financial markets because it would signal a continuity to that policy, which has been a boon to the economy. Markets would accept with less enthusiasm a Ma victory with a reduced majority … A DPP victory is the least favored outcome because of the uncertainty it is seen bringing to the relationship given China’s strong dislike of the DPP and the DPP’s wariness of China.

Once again, the argument isn’t so much about what’s good for the nation, but rather what’s good for the markets. It also claims Ma’s pro-China policy has been “a boon to the economy,” but does not provide any macroeconomic data to support this argument. (Hard facts: in the first quarter of this year, and despite the ECFA, Taiwan dropped one notch, to No. 6, as a source of imports for China.) Here Reuters is irresponsibly regurgitating the old line that the KMT is better for Taiwan’s economy than the DPP, without providing any evidence as to why this is so.