Taiwan's Lai Ching-te was inaugurated with a start marked by cultural celebration and political turmoil.
As political transitions go, the ascent of Lai Ching-te to the presidency of Taiwan had pretty much everything. On May 15, the outgoing President signed off amid a riot of yellow spandex and feather boas as Nymphia Wind, winner of the latest season of RuPaul’s Drag Race, led drag queens through the Presidential Office Building. Two days later, a real riot erupted in Taiwan’s legislature as lawmakers traded insults and punches over a bill that would heighten scrutiny powers over the government, and tens of thousands protested in the street. When Lai, who also goes by the anglicized name William, finally took office, on May 20, his inauguration speech so riled Beijing that it dispatched fighter jets and warships in “punishment” exercises designed to demonstrate its ability to “seize power.”
“So it has been a very smooth transition,” Lai tells TIME, with a straight face, in his first interview as President. “So far so good.”
A stoic embrace of peril and pandemonium is perhaps essential for the leader of a vibrant, febrile democracy—not least one perched beside an authoritarian superpower determined to bring it to heel. Taiwan became politically self-ruling in 1949 at the end of China’s civil war. The Chinese Communist Party (CCP) has never controlled the island of 23 million, which still officially uses the archaic title Republic of China (ROC). But Chinese President Xi Jinping considers it a renegade province whose “reunification” is a “historical inevitability” and has repeatedly threatened force to achieve it.
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The People’s Republic of China (PRC) sent 1,709 warplanes through Taiwan’s air-defense identification zone last year. For Lai’s saying in his address that the governments of Beijing and Taipei “are not subordinate to each other,” the People’s Liberation Army (PLA) launched “Joint Sword-2024A” drills that saw at least 35 aircraft cross an unofficial median line in the Taiwan Strait that until recently Beijing had largely respected.
“China’s ambition to annex Taiwan is part of their national policy,” Lai says. To achieve it, Beijing has set about diplomatically isolating Taiwan, which is barred from the U.N. or World Health Organization, and is officially recognized by just 12 governments; tiny Nauru peeled off 48 hours after Lai’s January election victory—an unprecedented third straight for the China-skeptic Democratic Progressive Party (DPP). “If our diplomatic allies decide to switch allegiance and choose the PRC, we wish them well,” Lai says, magnanimously.
Official recognition, after all, is not all the world sees. Lai’s inauguration was attended by 51 international delegations, including the U.S., U.K., Australia, Japan, and Canada. Not long after, the U.S. Congress sent a bipartisan delegation. Speaking to TIME, House Foreign Relations chair Ben Cardin called Taiwan “a beacon of democracy and good governance,” which is “confronting an existential threat from one of the world’s most authoritarian countries. This threat directly impacts the security of the United States and our allies.”
Taiwan has little choice but to strengthen bonds with the only democracy capable of facing down Beijing. It’s a key reason Lai tapped Hsiao Bi-khim, Taipei’s de facto ambassador in Washington, to serve as Vice President. A self-professed “Jersey girl,” Hsiao attended high school in America, and her mother’s family can be traced back to the Mayflower. “There is no scenario in which Taiwan defends itself without the United States,” says Oriana Skylar Mastro, author of Upstart: How China Became a Great Power.
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But the stronger the ties between Taipei and Washington, the more pressure Beijing puts on the island, and the greater the danger of finally exploding a Cold War conflict that has smoldered for 75 years. And as November’s U.S. election approaches, candidates of all stripes will vie to appear tough on China, and the potential return of the famously transactional Donald Trump portends another wobble of uncertainty for Taiwan’s tightrope. “One of William Lai’s biggest problems is going to be America,” says Kerry Brown, director of the Lau China Institute at London’s King’s College. “Enough politicians want to play around with Taiwan to get back at China. The era in which America was a predictable partner is over.”
Hsiao is keen to paint a different picture, saying she has “worked delicately and diligently to make sure that Taiwan … doesn’t become an issue of political competition, that both [American] parties can share ownership in a sign of unity and support.” What isn’t up for debate are the stakes: Taiwan produces 90% of the world’s most advanced semiconductors, and the global cost of a war over the island could reach $10 trillion, estimates Bloomberg Economics. That’s some 10% of global GDP, far more than the shock from the war in Ukraine or the COVID-19 pandemic.
The job of staving off such a catastrophe falls to a 64-year-old bubble-tea fanatic sporting ’90s throwback hair and loathed by Beijing as a “dangerous separatist.” And that’s fine by Lai. “I invite President Xi,” he says, “to jointly shoulder with us the responsibility of maintaining peace and stability, building regional prosperity, and advancing world peace.”
Lai grew up poor in a tumbledown, two-story house in the coal-mining hamlet of Wanli set amid mist-swathed hills north of Taipei. He was still a baby when a work accident claimed the life of his father, leaving his mother to raise six children alone. He walked an hour each way to elementary school in a childhood punctuated by the sight of sobbing widows clutching funereal white cloths by collapsed mine shafts.
The deprivations of Wanli gave Lai a determination and awareness of social injustice that propelled him first to medical school, then to work as a kidney doctor in the southern city of Tainan. “When I was little, I hoped to become a doctor so as to take care of the sick, relieve suffering, and save lives,” he says. “But during the process of Taiwan’s democratization, many young people devoted themselves to politics, including myself.”
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Lin Chun-hsien, a lawmaker representing Tainan, first met Lai when they were both junior campaigners for the DPP. Although nobody doubted Lai’s intelligence and social conscience, there was an obstacle. “When people encouraged William to step into politics,” Lin laughs, “he said he had to get permission from his mother.” She valued the security of a medical career. “My mother told me, ‘If people support you, then you should run for election; if not, then you should continue as a doctor,’” Lai recalls with a smile. “In other words, my mother felt that I probably would not pursue politics for very long!”
After four terms in the national legislature, Lai ran for mayor of Tainan. “Our campaign meetings would end at 10 p.m.,” Lin recalls. “Afterwards William would go straight into policy meetings, which would only be wrapping up when I returned early the next morning.”
In seven years in office, Lai eschewed populist policies in favor of tough choices. A project to ease gridlocked traffic involved relocating more than 300 homes. The mayor went door-to-door to persuade residents to vacate and was frequently chased away. But his most transformative achievement was persuading TSMC to establish a $40 billion foundry in Tainan, where today the semi-conductor colossus produces its most advanced 3nm chips for firms such as Apple and Qualcomm.
The project helped entrench Taiwan both in global supply chains and in today’s simmering tech competition between the U.S. and China. The U.S. CHIPS and Science Act includes $39 billion in subsidies to bring chip manufacturing back to the U.S., including $6.6 billion for new Arizona operations of TSMC, whose key clients such as Nvidia and AMD are barred by U.S. export controls from selling their most advanced chips to Chinese firms. “In this era of smart technologies, semiconductors have become crucial,” says Lai.
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The world’s reliance on Taiwan’s semiconductor industry has been dubbed a “silicon shield” that renders the price of any conflict too high for China, the world’s No. 2 economy and largest trading nation. If U.S. efforts to stymie China’s access to cutting-edge chips risks weakening that shield, President Joe Biden has offered a genuine one, dispatching billions of dollars in high-tech weaponry, and in a recent interview with TIME he didn’t rule out using U.S. military force to defend the island. Clearly, the delicate status quo over Taiwan is shifting. “We have to be careful not to suggest U.S. policy is to keep Taiwan out of the hands of the PRC no matter what, even if it’s done peacefully,” cautions Mastro. “That could turn a war of choice into a war of necessity for China.”
The risk is that with Taiwanese identity at a historic high, and U.S. backing for the island never stronger, Beijing may feel compelled to act. It shows evidence of preparing to. In the past three years, the PLA has added over 400 advanced fighter aircraft and more than 20 major warships, while more than doubling its ballistic and cruise-missile inventory. Former U.S. Indo-Pacific Command chief Admiral Phil Davidson testified to Congress in 2021 that China wanted the capability to seize Taiwan within six years—a timeline that has since been backed by other U.S. military figures and, if true, would fall within Lai’s first term.
Lai, once again, projects calm. While admitting “geopolitical changes will continue to impact the dispersion of semiconductor companies,” he “does not believe that this will increase the risk of conflict.”
Kinmen is a rocky island that lies just three miles off the coast of mainland China yet remains administered from Taipei. When the Nationalist forces of Generalissimo Chiang Kai-shek first fled to Taiwan, Kinmen was fiercely defended as a vital staging post for eventually reclaiming China. Deep tunnels were hewed from its rock and defensive ramparts erected on its powder white beaches.
Kinmen was also where U.S. support for Taiwan first became explicit. When in 1954 Mao Zedong unleashed an artillery blitzkrieg on it, President Eisenhower felt obliged to set aside reservations about Chiang’s authoritarian project and signed a mutual defense treaty between the U.S. and the ROC. Even after President Nixon switched official recognition to Beijing in 1979, Congress demonstrated its steadfast support for Taipei with the Taiwan Relations Act, which obligates the U.S. to sell the island weapons for its own defense.
Ever since, Kinmen has been a barometer of cross-Strait relations. In times of high tension, shells fly and residents hunker in fortified foxholes. And when relations eventually warmed, Kinmen was at the heart of the rapprochement; direct people-to-people, trade, and postal connections opened between Kinmen and the neighboring Chinese city of Xiamen in the early 2000s. But by early 2020, China’s strict zero-COVID measures had severed the links, and political tensions have prevented their full restoration. A nadir was reached in February after a fatal boat collision claimed the lives of two Chinese nationals off Kinmen, prompting Beijing to reject a tacitly respected prohibited-waters line. Deteriorating relations are difficult for locals reliant on cross-border trade. “Lai Ching-te is dangerous,” says elderly resident Xu Fei, shucking oysters outside her swallowtail-eaved shophouse in Kinmen. “Xi Jinping is China’s new emperor, and we have to live with him.”
China’s recent economic woes—rising youth unemployment, a stock market in free fall, and spiraling debt—could provide a new opportunity. (China accounted for 83.8% of Taiwan’s foreign investment in 2010; last year, it was only 11.4%.) Both of Taiwan’s main opposition parties advocate restarting negotiations on a Cross-Strait Service Trade Agreement, which stood to boost economic integration between China and Taiwan but stalled after being targeted by student-led protests in 2014.
Lai is fine with the status quo, arguing that “the time for this has long passed” and citing “substantive differences opening up between Taiwan’s economy and China’s present economic structure.” So determined is the DPP to sideline China that after an earthquake hit the Taiwanese city of Hualien on April 3 and the PRC offered to donate 100 prefabricated homes to victims, the offer was rebuffed. It was “not what the people affected by the Hualien earthquake required at the time,” Lai says.
Lai also demurs on the blandly named 1992 Consensus, a political fudge agreed to by Beijing and a former Nationalist (KMT) government in Taipei stating that both sides concur they belong to the same nation, even if they bicker over which is the legitimate government. But Lai’s DPP does not recognize the Consensus, and a September poll suggests 76.7% of respondents see themselves as Taiwanese, rather than Chinese or some mix. “The 1992 Consensus is a fairy tale,” says Brown. “But people need fairy tales, and without it there’s no common framework to talk and make sure neither side does something dumb.”
Lai disagrees, insisting that any interactions should be “mutually beneficial and reciprocal,” with tourists and students flowing in both directions or not at all. Moreover, he adds, “the PRC should recognize that the Republic of China exists.”
That plain speaking goes a long way toward explaining why Lai is singularly despised in Beijing. He has been to the PRC only once, in 2014, on a cultural exchange as mayor. It wasn’t a success. Speaking with faculty and students at Shanghai’s Fudan University, Lai was asked if the DPP would amend its goal of independence to mend ties with China. Instead of dodging the question, Lai candidly replied that a desire for independence was a consensus among Taiwan’s people. In 2017, Lai went further, describing himself as a “pragmatic worker for Taiwan independence”—a phrase that has dogged him ever since despite repeated efforts to walk it back.
The bar is higher for Lai than for any other recent Taiwan leader. He correctly points out his “not subordinate” statement had been uttered by both outgoing President Tsai Ing-wen and her KMT predecessor Ma Ying-jeou, but not at their inaugurations. “We were surprised that President Lai would bluntly spell out that the sovereignty across the Taiwan Strait is not overlapping,” says Alexander Huang, director of international affairs for the KMT. “He did not give any room for the flexibility or constructive ambiguity that have existed for 20 years.”
Lai tells TIME, “What I said was the truth. According to international law, we are already a sovereign and independent country. My goal is to bring the people of Taiwan together.”
Yet divisions are what have defined Lai’s first few weeks in office. Crucially, in the same election that lifted Lai to the presidency, the DPP lost control of the legislature to the KMT and the similarly China-friendly Taiwan’s Peoples Party. And indeed the legislature provided Lai his first major test. On May 28, it passed an amendment that obligates military, government, and even private citizens to answer questions and provide any information requested by lawmakers, among other enhanced scrutiny powers. Opponents see China’s fingerprints on the measure, pointing out that 17 KMT lawmakers traveled to Beijing in late April and met with CCP No. 4 and chief ideologue Wang Huning.
“The [CCP] has now infiltrated our Congress,” says Robert Tsao, a billionaire former semiconductor mogul who has donated $100 million to efforts to curb Beijing’s influence in Taiwan. “It’s so obvious.” Asked whether he agrees, Lai offers a measured reply: “Political parties should put national interests above their own.”
As the bill was being passed, tens of thousands gathered outside the legislature, brandishing placards saying democracy is dying and welcome to xi jinping’s evil empire. Inside, DPP lawmakers waved lights, shouting, “Brush your teeth, your breath stinks” at their KMT peers, who clutched sun-shaped balloons and chanted, “Let sunlight into the legislature.” Huang of the KMT denies that the CCP lies behind the amendment, whose intention is simply “to rebalance executive and legislative checks and balances,” he says. “It’s not closed-door or unjustified in terms of procedure.”
The bill stands to slow Lai’s ambitious domestic agenda, which includes raising the minimum wage, building a Taiwanese space industry, and enhancing social welfare. “The task before Lai is to stay the course without getting frustrated,” says Chong Ja Ian, an expert on Taiwan politics at the National University of Singapore. “Because if he makes a mistake, not only will his domestic opponents seize on it, but the PRC will as well.”
Living precariously is as much a part of Taiwan’s identity as colorful protest, bubble tea, and drag queens in the corridors of power. And today more than ever, the job of preserving the freest place in the Chinese-speaking world involves choices that ripple across the globe. “My responsibility,” says Lai, “is to deepen Taiwan’s democracy and enable hard-working people from all walks of life to realize their ideals and contribute to our country.”