Save the Sinking Ship: Can the KMT Reform?

This is part two of a three part series. Part 1 can be found here: The Race Is On: The Next Chairman of the KMT

By all measures, the January 2020 election was a blowout re-election for President Tsai Ing-wen (蔡英文) and the Democratic Progressive Party (DPP). She set a record for the most votes ever received in a presidential election in Taiwan, and increased her margin of victory over her opponents from 56.1% to 57.1%–a remarkable feat for an incumbent in any country. While the DPP lost about 10% of their seats in the legislature, they retained a majority–and with allies, a fairly strong one.

The last national election in 2016 produced a similar result: A blowout win for the DPP in both the presidential race and in the legislature. Clearly the Chinese Nationalist Party (KMT) has an electibility problem in national elections.

Chairman Wu Den-yih (吳敦義), who resigned to take responsibility for the defeat on January 15, has been nothing short of a disaster, failing at the most basic tasks. Financially the party is in dire straits, and he caused their richest patron–Foxconn founder Terry Gou (郭台銘)–to leave the party in a huff after Wu repeatedly rigged the rules of the presidential primary to favour of Han Kuo-yu (韓國瑜) over Gou.

Even within the party there was an outcry over the party list of candidates to be allotted proportionally in the legislature. Wu picked not only himself for the list, but also candidates widely perceived to be in the pocket of the Chinese Communist Party. He abandoned even the few feeble attempts his predecessors had made to reach out to younger voters, openly promoting candidates who almost entirely qualify for pensions, and few of them were women. Even the basics were neglected: In the couple of weeks prior to the election their website went down, “server not found” suggesting their server went down and they didn’t fix it, or they failed to pay their hosting bill. Voters looking to find out about their platform, the hoards of international media descending to cover the election, could only stare at a “server not found” screen for their efforts.

As the election results were rolling in, the calls for the party to reach out to youth were already being voiced. No wonder, the party has little support with people under 40. In a mock election held in December of 11,369 students–of whom 2,775 were high school students and rest college students–the party won 2.99% of the party list vote, putting them (in order) behind the New Power Party (NPP), the DPP, the Taiwan Statebuilding Party (TSP), the Taiwan People’s Party (TPP) and the Green Party. That doesn’t bode well for the party’s future.

There were also calls to abandon the “1992 Consensus” and reform the party’s China policies to bring them closer in line with public opinion. KMT Youth League head Hsiao Ching-yan (蕭敬嚴) pointed out that Taiwanese “achieved consensus in refusing to acknowledge the legitimacy of the 1992 Consensus” and went on to advocate a new consensus that is explicitly anti-unification with China. The DPP and President Tsai’s stance–that the Republic of China Taiwan is already an independent nation, rejects the “1992 consensus” and is much closer to mainstream public opinion. The KMT’s pro-engagement policy with the People’s Republic of China as the path to riches and peace, the “1992 consensus” and advocacy of eventual unification with China are decidedly unpopular.

Serious uphill battle

KMT under Acting Chairman Lin Rong-te (林榮德) has established a reform committee to produce a report by the end of March, by which time a new chair and Central Standing Committee will be in place. The committee’s remit addresses the main problems: reforming the party’s personnel structure, China policy, youth participation and finances.

Whether the KMT reforms itself or not will depend on what the reform committee’s proposals are, who wins the currently ongoing KMT chair and Central Standing Committee races, whether the new chair is behind these or other reforms and finally, can the chair forge consensus in the party to actually carry them forward.

The reform committee is being formed with an eye towards bringing in both younger members and building consensus. From the Taipei Times:

“The new committee would consist of Central Standing Committee members, KMT mayors, county commissioners, legislators and local councilors, as well as party members who can represent younger generations, party chairperson by-election candidates, experts and academics, the party said.”

The party is also hoping to encourage reform of the Central Standing Committee itself, encouraging more young candidates and barring KMT members affiliated with the Chinese People’s Political Consultative Conference and the China’s National People’s Congress from running.

In theory, all these moves seem to bode well for the party’s efforts at reform. In practice, they are facing a serious uphill battle.

Two of the reforms, tackling the party’s personnel structure and finances, are closely linked. From a Voicetank article translated on Ketagalan Media:

“According to publicly available reporting from each political party, in 2018 the KMT has an income of NT$430 million dollars from government subsidies, donations and membership dues. They are not exactly starving to death because their assets are frozen.

Their problem is with their expenditure. According to the same data, the KMT’s personnel expenses amount to a whopping NT$1.75 billion dollars. This is why Wu, as chairman, had to bust his chops fundraising and taking out loans of NT$25 million a month. In comparison, the DPP’s personnel expenses are NT$136 million dollars, less than a tenth of the cost.

What’s the difference? 1.59 billion of the 1.75 billion goes to paying out pensions. In other words, the real cost of labor for the party is about comparable to the DPP, but about nine times more of that cost goes to people who no longer work there. This is a problem long in the making, and the party leadership knows all too well how they got there.”

Until recently the KMT was staggeringly rich and frequently referred to as the “richest political party in the world.” During the martial law era, Taiwan was effectively a one-party state under the rule of the KMT. Many assets were taken over from the Japanese colonial government after they were expelled following the end of World War II. The party also grabbed other assets through government action, sometimes expropriated from local businesses.

This all changed with the passage of the Ill-gotten Assets Law by the DPP majority legislature, which froze party access to those assets. When the party was rich, it was packed with people who were given plum patronage jobs for their loyalty to the party. Even though the party has moved to significantly reduce the number of employees, the KMT is still on the hook for the generous pensions of thousands of people, more than the 700 to 800 people they employ.

Worse, according to one knowledgeable source, the party has removed useful professionals such as pollsters, but not (to use his colorful phrase) the “professional cigarette smokers and tea drinkers.”

The reform committee’s task of tackling an NT$1.32 billion annual shortfall is a huge one. It is highly doubtful that new membership fees could make much of a dent. Worse, the party has alienated Terry Gou, who previously helped bail the party out and has been a generous donor in the past. They could tap some of the rich top brass of the party, such as former Vice President and Chairman Lien Chan–but will they each be willing or able to donate the tens or hundreds of millions needed annually?

It is also tasked with reforming the KMT’s personnel, which creates a catch-22: If they bring in new, more professional staff that will add costs, both in the form of new wages and in new pension liabilities. But if they don’t professionalize their team, that will make it that much harder to win the presidency and the legislature in 2024, which may be their only long term way of of their financial predicament: Use their majority and the presidency to overturn the party assets law (if the assets haven’t all been disposed of by then).

The other two issues the reform committee is intended to find solutions for–youth participation and China policy–are also connected. Support for the KMT among people under 30 is almost non-existent, and weak among those under 40. The biggest reason by far is that the KMT at its core believe that Taiwan is ultimately a part of China. The vast majority of youth in Taiwan have no interest in being absorbed into the PRC, and self-identify as Taiwanese. Cross-strait relations is the subject of Part Three of this series.

Young or old supporters? 

Leaving aside Taiwan-China relations, are there areas they could improve their outreach and popularity with younger voters? Maybe some, but several key decisions made under Wu will make it more difficult.

Much will depend on who they select as chair and how well that person understands and knows how to communicate with younger voters. Certainly better brand management and social media outreach could be boosted and improved significantly–and they get their website up and running again. That alone, however, won’t mean anything more than a small boost without having something to communicate that resonates with younger voters. That’s a problem.

Younger voters tend to be more socially progressive, with the iconic issue of the younger generations being marriage equality, which has been partially completed. Most of the KMT voted against the legislation, and in southern Taiwan many KMT candidates openly campaigned on reversing the law in the last two elections. There is only one possible candidate for chair whose name has been floated as a possibility who voted in support of key portions of the law, Wayne Chiang (蔣萬安)–but no others did. Chiang, however, decided not to run, but took the position of party secretary, where he may be of some help.

Traditionally both the DPP and KMT have had left and right wing factions, but under Wu the party moved strongly into social conservatism. That most likely explains their improved vote count in rural districts with older demographics. Wu also dropped the most vocally socially liberal, and relatively young, legislator Jason Hsu (許毓仁) from the party list of proportionally selected legislators. Wu doubled down on selecting older, more conservative and largely male legislators for the party list, and the party’s candidates running in geographical districts were also on average significantly older than their DPP counterparts.

This means that no matter who the new chair is, getting the KMT party caucus on board to support socially progressive (or Taiwan sovereignty friendly) policies could be difficult. Worse for the KMT, even if the caucus was on board for any proposed policies, they would have to overcome the DPP majority or convince the DPP to support it–in which case the DPP could claim some credit for it. Even if they overcame all those obstacles, they’d risk alienating their solid core of older, more socially conservative supporters.

This means the new chair is caught between several rocks and hard places on trying to reach out to youth voters. Radical moves that would change the game for the next generation would run into significant blowback from inside the party. That would require a strong, visionary leader.

Most likely the party will be stuck trying to thread the needle with policies that aren’t too offensive to their base, but appeal to the young. The Han campaign tried some of these, such as proposing subsidies covering a whole range of issues that matter to younger voters, including for studying abroad. They didn’t work. Most of the proposals simply doubled down on things the DPP was doing already and didn’t gain much traction or communicate much of a unique vision.

Similarly, the party worked to promote themselves as the anti-pollution and food safety party. That may have helped them somewhat in the local elections in 2018, but the issues didn’t move the needle much in the national elections. Currently, their platform includes boosting nuclear power by extending the shelf-life of three plants slated to be decommissioned in the next few years, and to finish construction on a mothballed fourth plant. That would help with emissions, but even the KMT’s mayor in the city with the fourth plant is opposed to completing it and it isn’t a winning issue with most younger voters.

Perhaps they could get creative, pitching modern small, modular nuclear plants and some other hot new technologies that might gain some traction. There may be other out-of-the box proposals that could attract younger voters on specific issues here and there–but without a big home-run of an idea the numbers aren’t likely to be huge.

All of these things may boost their support among younger voters…by a bit. Until they tackle the central interconnected issues of national identity, party identity and China relations they aren’t going to make significant headway. In fact, all of the issues facing the party are deeply connected to the issue, including finances. That is the subject of the next part of this series.

(Feature photo from Han Kuo-yu’s Facebook page)