TAIPEI (REUTERS, BLOOMBERG) - Taiwan President Tsai Ing-wen appointed the ruling pro-independence party's former chairman as premier on Friday (Jan 11), a day after incumbent William Lai said he was resigning, along with the entire Cabinet, in response to local election defeats.

The election losses in November presented a major challenge to Ms Tsai, who came under mounting criticism at home over her reform agenda while facing renewed threats from China, which considers Taiwan its own.

Ms Tsai appointed Su Tseng-chang, a two-term former chairman of her Democratic Progressive Party (DPP), saying Taiwan faced challenges amid rising Chinese threats and trade tension between key backer the United States and China.

"Taiwan's democracy and development must face certain challenges," Ms Tsai said, adding that China was looking to force its "one country, two systems" structure on the island.

Mr Su, 71, vowed to lead the administration amid the challenges and learn from earlier mistakes.
"The situation is difficult and the task is tough," he said.

The resignation adds to the multiple challenges facing Ms Tsai. Amid the ongoing trade war between the US and China, Taiwan's two largest trading partners, Chinese President Xi Jinping has ratcheted up the pressure, calling in a speech last week for the beginning of talks on an eventual unification of the two sides of the Taiwan Strait. Tsai rejects China's claims to sovereignty over Taiwan.

"No matter who Tsai appoints as the next premier, it will be difficult for her administration to improve their performance," said Jou Jyh-bang, a professor at Taiwan University's Graduate Institute of National Development.

"In the year ahead there are external pressures as the US-China trade war is likely to have a negative impact on Taiwan's economy, and it's also unlikely she'll be able to achieve a breakthrough in cross-strait relations. She faces a very tough path to win reelection."

Ms Tsai's appointment of a new premier will be key to her chances of staying in power beyond next January's presidential vote. The new administration will be tasked with winning back public support after the DPP suffered a heavy defeat to the China-friendly opposition Kuomintang in local elections in November.

Mr Lai is the second premier to quit since Ms Tsai took office in 2016. It is standard practice in Taiwan for leaders to quit when their party loses a major election, and Mr Lai had initially offered to resign in the immediate aftermath of November's vote before Ms Tsai persuaded him to stay on.

"I must resign to take responsibility for the election defeat," Mr Lai told a Cabinet meeting on Friday after he and other ministers resigned.

The Cabinet resignations will take place later on Friday and are expected to be followed by new appointments.

Taiwan's premier forms the Cabinet and runs the government on a day-to-day basis. The post is a relatively high-turnover position in Taiwan's presidential-led political system. Since the island's first democratic elections in 1996, the average duration of a premier's term in office has been 16 months. Lai assumed the post in September 2017, just 16 months ago.

Ms Tsai was expected to announce the new premier in a media briefing later on Friday, which would be followed by new ministerial appointments.

Mr Su was appointed premier in 2006 by former president Chen Shui-bian, who infuriated Beijing and strained Taiwan's relationship with the United States during his tenure from 2000 to 2008.

The folksy Mr Su, popular among the DPP's core supporters, has led Taiwan's most populous New Taipei City for years. He was defeated by a candidate from the China-friendly opposition Kuomintang in November.

Ms Tsai has said her administration would reflect upon the election defeat but would stand firm to defend Taiwan's democracy in the face of renewed Chinese threats.

"The new premier not only has to focus on domestic matters but must also pay much more attention to cross-strait and national security issues," Yao Chia-wen, a senior adviser to the president, told Reuters.

He said the new premier must deal with issues including the prevention of swine fever from China, as well as possible election interference.

Some from within the embattled leader's party have urged Ms Tsai not to seek re-election. She has not explicitly said whether she would run for president in 2020.