Local elections in Taiwan, held on November 29, were a debacle for the ruling Kuomintang (KMT)—the Nationalist Party. It was soundly defeated by the opposition, including in traditional KMT strongholds. The prime minister, as well as the entire cabinet, then resigned.

Approximately 20,000 candidates competed for 11,130 local positions throughout the country, including mayoral posts in six major cities. The opposition Democratic Progressive Party (DPP) won 13 of Taiwan’s 22 cities and counties. The ruling party managed to retain only 6 of the previous 15 it held. Independent candidates took control of the other three, including the capital, Taipei. Overall, the DPP received 47.56 percent of the vote, while the KMT got only 40.7 percent. Voter turnout was 67.59 percent.

Ko Wen-je, an independent who was backed by the DPP, easily defeated KMT candidate Sean Lien to become the mayor of Taipei, traditionally a KMT stronghold. Ko’s victory was the first for a non-KMT candidate in 16 years. The victory rattled the ruling party, as the mayoral post is seen as a stepping stone to the presidency.

With presidential elections scheduled for January 2016, the DPP is clearly hoping that the results will pave the way for its return to power. DPP chairwoman Tsai Ing-wen declared: “Tonight’s election results are an historical prologue for change… From this moment forward, we will begin from the ground up and win back Taiwan, one step at a time.”

The defeat prompted a wave of resignations within the ruling party last week, starting with Prime Minister Jiang Yi-huah, who stepped down just hours after the results were confirmed. President Ma Ying-jeou selected Vice Premier Mao Chi-kuo to fill Jiang’s vacated position.

On December 1, Taiwan’s 81-member cabinet formally resigned en masse. However, most cabinet members were reassigned to their posts with a minimal amount of reshuffling. The ministers for defense, finance and China policy were unchanged, while John C. C. Deng was appointed the new economics minister.

In a largely ceremonial gesture, President Ma stepped down as KMT party chief on December 3, saying: “During this election, our party faced a very frustrating defeat. As the chairman of the party, I would like to apologize to all our supporters, our party’s pioneers and founding members.”

Far from indicating positive support for the DPP, the election was a sign of widespread disillusionment with the KMT. Ma won the presidency in 2008 promising to ease tensions with China and claiming that closer economic ties would boost growth and jobs. Instead the economy is stagnating, with one newspaper warning recently that it was entering a “mediocrity era.”

Younger voters in particular expressed their frustration with the current government. Youth unemployment has been high for years, and is currently hovering around 14 percent. Jobs that people do find are low-paying positions. At the same time, housing prices over the past 10 years have tripled, making it nearly impossible for young people to purchase homes. The average cost of a home in Taipei is $NT22.2 million ($US740,617).

As economic conditions have worsened, opposition has grown to Ma’s efforts to forge stronger links with China. In June last year, Ma’s government signed the Cross-Strait Services Trade Agreement (CSSTA), designed to open up services in Taiwan to China. Many small businesses fear that they will suffer as a result of this deepening economic integration.

In March and April this year, students held a 24-day occupation of Taiwan’s parliament building to oppose the ratification of the CSSTA and voice their concerns over deteriorating job prospects. To date, the agreement has still not been approved.

The recent protests in Hong Kong over Beijing’s decision to vet candidates for the 2017 election for the city’s chief executive have provoked concerns in Taiwan about stronger political ties with China, which regards Taiwan as a renegade province. Beijing is calling for the reunification of Taiwan with China on the same basis as Hong Kong—one country, two systems—which allows for a degree of political autonomy.

After the Chinese Revolution in 1949, the KMT fled China and established its dictatorship in Taiwan, with US military backing. Following the restoration of capitalism in China over the past three decades, the KMT, which claimed to be the legitimate government of China in exile, has slowly established closer relations with Beijing. It is backed by sections of the corporate elite that have invested heavily in China.

The DPP, which was formed in the 1980s as the KMT established formal parliamentary democracy, cautiously advocates Taiwanese independence from China. It represents elements within the ruling class whose business interests are bound up with global exports and investment, or who are concerned about competition from Chinese companies.

Taiwanese independence is a very sensitive issue, however. In 1992, Beijing and Taipei agreed to the “one China” principle and accepted that Taiwan was a part of China, without giving up their respective claims to each other’s territories. In 2005, when the DPP held the Taiwanese presidency, Beijing adopted an “anti-secession” law that called for military action if Taipei announced independence.

The latest local elections took place as the US pursued its aggressive “pivot to Asia,” designed to militarily and economically surround China. The United States is upgrading Taiwan’s fleet of F-16 fighter jets, antagonizing China in the process, as part of arms deals worth billions of dollars. The KMT has also pushed the Obama administration to provide Taipei with diesel-powered submarines and F-35 fighter jets.

To date, the Obama administration has been careful not to formally breach the “one China” principle that the US adopted after the 1972 rapprochement brokered by President Richard Nixon with Mao Zedong in Beijing. The US formally terminated diplomatic relations with Taipei in 1979 after establishing relations with Beijing, but declared that it would continue to arm Taiwan and oppose any forceful integration of the island by China.

At the same time, the Obama administration has ensured that relations with Taiwan remain strong. Last week Raymond Burghardt, chairman of the American Institute in Taiwan (AIT), declared that the US strove to maintain good relations with both ruling and opposition parties, saying that he had been on familiar terms with DPP head Tsai Ing-wen for years. The AIT serves as Washington’s de facto embassy in Taiwan. Tsai, who is believed to be the DPP’s preferred candidate for the presidential election, is due to visit the United States in February for top-level discussions.