New Taiwan's President Tsai Ing-wen, center, and Vice President Chen Chien-jen, right, attend their inauguration ceremonies in Taipei, Taiwan, Friday, May 20, 2016.
New Taiwan's President Tsai Ing-wen, center, and Vice President Chen Chien-jen, right, attend their inauguration ceremonies in Taipei, Taiwan, Friday, May 20, 2016.

TAIPEI - Taiwan President Tsai Ing-wen, backed by a historically anti-China party, has taken office with pledges to seek peace with Beijing, but snubbed its demand for dialogue, setting the stage for at least a short-term pullback in relations after eight upbeat years.

The new president, also Taiwan’s first female leader, said in her inauguration speech Friday that she would seek peace. She advocates neither declaring Taiwan’s formal independence from China – a red line for Beijing – nor unifying with the political rival of 70 years per Beijing’s long-term goal.

But the 59-year-old law scholar ignored Beijing’s warnings that she consent to dialogue on the premise that China and Taiwan belong to one country.

“Relations with mainland China are an important link in the regional security system,” Tsai said in her 25-minute speech before an estimated 30,000 people. “We will work to maintain peace and stability in cross-Strait relations. The two governing parties across the Strait must set aside the baggage of history and engage in positive dialogue, for the benefit of the people on both sides.”

Change in direction

Outgoing President Ma Ying-jeou agreed to dialogue under conditions that cast both sides under Beijing’s one China demand, with Taiwan as the Republic of China and Beijing as the People’s Republic of China. Over Ma’s eight years, the two sides reached 23 deals on trade, tourism and investment while building mutual trust that was absent under other presidents.

Tsai acknowledged the talks in 1992 that created the one-China backdrop, but said the government must approach China also based on the constitution, Taiwanese laws and the “democratic principle and prevalent will of the people of Taiwan.”

Diplomats worldwide, but especially in Beijing, had counted down to Friday on expectations that Tsai might propose a dialogue mechanism agreeable to China.

But Tsai’s party rejects ideas that the two sides fall under one flag. She advocates talks with Beijing, but more cautiously compared with Ma.

Voters handed Tsai a landslide victory in January because many felt Ma’s Nationalist Party had grown too close to China through economic ties, including two-way trade that hit a record $130 billion in 2014. At mass protests in 2014, those skeptics vented fear Beijing would use economic ties to exert more political control over the self-ruled island.

Beijing has claimed sovereignty over Taiwan since the Chinese civil war of the 1940s. As late as 2005 it had threatened military force if Taiwan veer too far toward legal independence from China.

“What matters is what Professor Tsai personally thinks of the kind of relationship between Taiwan and mainland China is at this moment,” says Liu Yi-jiun, public affairs professor at Fo Guang University in Taiwan. “If things don’t go as expected on the part of mainland China for sure [relations] will undergo severe changes. No one will deny any chance of that.”

Standing in front of a portrait of the founding fa
Standing in front of a portrait of the founding father of the Republic of China, R.O.C., Dr. Sun Yat-sen, Taiwan's President Tsai Ing-wen recites the oath of office during the swearing-in ceremony at the Presidential Office in Taipei, Taiwan, May 20, 2016.

Beijing's view

China has warned Tsai since the election to keep up dialogue on the one-China condition, but made no specific threats. Beijing, however, carried out a military drill Wednesday.

Tsai might spend her first two to three months collecting opinions and data to form a dialogue proposal that both sides can accept, political analysts say.

In case Tsai makes an overture, Beijing is not expected to cancel the broadly popular agreements reached under Ma’s government. Chinese officials hope those deals excite Taiwan’s public about ties with China and someday bring about political unification.

But China may dial back on some deals as a reminder that a lack of dialogue can hurt the island’s economy and world political standing.

China may buy off a few of Taiwan’s 22 remaining diplomatic allies, issue fewer permits to Taiwan-bound tourists, ask exchange students to avoid the island and have more Taiwanese deported from third countries to China if suspected of fraud.

That effort began after the election. In March China formed diplomatic ties with former Taiwan ally Gambia and a month later ordered 67 Taiwanese fraud suspects deported from offshore to China. Since the election, it has cut the number of travel documents, noticeable especially during China’s May 1 holiday week.

Tsai is also expected to hold off any action on Taiwan’s disputed claim to the 3.5 million-square-kilometer South China Sea. Ma has championed the claim over the past year, but his effort effectively supports Beijing. China and Taiwan use the same historic basis for the maritime claim, irking four Southeast Asian countries.

FILE - This photo released by the Military Informa
FILE - This photo released by the Military Information Agency in Taiwan shows two Taiwanese warships docking near the shore of Taiping Island, the largest of the disputed Spratly Island chain, with the Taiping military base in the foreground.

Tsai's policies

The president will focus largely on domestic economic policies aimed at helping common Taiwanese live better, her Cabinet spokesman Tung Chen-yuan says. She has pledged to develop solar and wind power while cutting back on nuclear energy. Other policies will favor biotech and defense, government spokesman Tung says. Tsai will also “balance” trade ties weighted now toward China toward other markets, he adds.

“She needs to show she has the policies of policy direction for Taiwan’s economy, so that will be one of the many policy areas that she needs to address – whether she can come up with a policy to diversity our trade partners, our tourist markets and so on,” said ruling Democratic Progressive Party lawmaker Lo Chi-cheng.

Tsai said during the campaign she would build 200,000 units of affordable housing, a boost to youth with low salaries. Later, Tung said, she will target wages and jobs.

“The work search environment isn’t too strong and salaries have been pressured very low,” said Huang Chun-jung, a leader in the advocacy group Taiwan Youth Public Affairs. “Basically what we hope most is that the new government can help young people find work. We need to see actual policies. We have an expectation but we need to keep watching.”

The United States, which has long supported the so-called one China policy, said Friday it looks forward to working with the new government in Taiwan.

A statement issued by the American Institute in Taiwan, which represents U.S. interests in Taipei in the absence of formal diplomatic ties, said, "We look forward to working with the new administration, as well as with all of Taiwan's political parties and civil society groups, to further strengthen the ties between the people of the United States.”