Taiwan: The Dangerous U.S-China Flashpoint

While Taiwan remains China’s largest trading partner, the two share a turbulent history with lack of political concurrence despite sharing a common cultural heritage. The historical roots of China’s territorial claims over Taiwan are found in the Qing dynasty. Taiwan was ceded to Japan after the empire’s defeat in the Sino-Japanese War of 1895 under the Treaty of Shimonoseki.

After Japan’s defeat in World War II, Taiwan was reverted to China under the Cairo Declaration. However, upon facing defeat by communists in the Chinese Civil war (1949), the nationalist party, Kuomintang (KMT) retreated to Taiwan and established the Republic of China (ROC) while mainland China became People’s Republic of China (PRC).

Since then, China asserts that there is only one China and that Taiwan is an inalienable part of it that will eventually reunify with the mainland under its ‘One China’ policy. President Xi Jinping promotes peaceful unification with Taiwan to rejuvenate the Chinese nation through the ‘One country, two systems’ formula, emphasizing Taiwan’s autonomy under Chinese sovereignty and expediting cross-strait integration through preferential policies, while opposing Taiwan’s secession through coercive means, simultaneously.

The United States has adopted strategic ambiguity for its Taiwan policy, warranting a complicated balancing act in the delicate relationship involving China, Taiwan and itself. The U.S ‘One China’ policy evolved to be distinct from China’s ‘One China’ policy. It is governed by a confluence of factors including the Shanghai Communique, the 1979 Communique, the 1982 Communique, the  Taiwan Relations Act (TRA) and the Six Assurances conveyed to Taiwan whereby the U.S acknowledges that there is one China and Taiwan is a part of it while recognizing that PRC is the sole legal government of China.

Moreover, the U.S emphasizes cross-strait military balance while not committing to ensuring Taiwan’s defense through direct military intervention. The U.S also fosters cultural, commercial, diplomatic and other ties with the island through the American Institute in Taiwan (AIT) while selling arms to Taiwan for self-defense, additionally.

Sino-US Tensions Over Taiwan

Taiwan lies at the fulcrum of the reactionary diatribes between the United States and China, aggravating the action-reaction dynamic between the two powers. The strategic confrontation between the U.S and China first escalated during the 1958 Taiwan Strait Crisis which drove the two states to the brink of a nuclear war.

The rivalry between the two countries reignited during Trump’s first administration as the U.S deepened ties with Taiwan by virtue of regular arms sales and a $250 million complex for its de facto embassy in Taipei. In addition, Trump’s phone call to Tsai was the first contact between leaders of the island and the United States since the relations were severed in 1979, marking a major deviation in ‘One China’ policy protocols and disregarding the political foundations of U.S-China ties.

The Biden administration followed suit and facilitated Taiwan, both militarily and economically by selling arms, granting U.S defense stocks worth $1 billion, passing the 21st Century Trade Agreement as well as enacting the CHIPS and Science Act (2022) to revitalize the U.S semiconductor industry. Moreover, President Biden repeatedly emphasized that the U.S would defend Taiwan in case of a Chinese invasion. These political statements contradicted the existing U.S ‘One China’ policy as increasing support to Taiwan marked a shift from ‘Strategic Ambiguity’ to ‘Strategic Clarity’.

Beijing was infuriated by U.S actions and accused the state of pursuing a ‘fake’ One China policy and warned that the U.S could face ‘military conflict’ with China over the future status of Taiwan. Consequently, former House Speaker Nancy Pelosi’s visit to Taipei was followed by China’s encirclement of Taiwan and the median line was crossed over 300 times. In the aftermath of Taiwanese President’s meeting with then House Speaker Kevin McCarthy, China also simulated ‘precision strikes’ on Taiwan under Joint Sword exercises as part of its grey-zone warfare tactics.

In his second term, President Trump has thus far declined to take a stance over the China-Taiwan conflict. Considering Trump’s termination of foreign assistance and dismissal of the CHIPS and Science Act (2022), Taiwan’s position is becoming increasingly vulnerable since it dominates the semiconductor industry and heavily relies on the U.S for military aid. Moreover, as the Taiwan Semiconductor Manufacturing Company (TSMC) announced a $100 billion investment in the United States, the ‘silicon shield’ protecting Taiwan against China’s aggression is under threat.

Amid the evolving dynamics of the geopolitical flashpoint, the U.S warships’ freedom of navigation operations (FONOPs) in the Taiwan Strait also challenge China’s maritime claims including the ‘Nine-Dash Line’, fueling the contentious U.S-China rivalry. Ironically, Trump’s recently declared territorial ambitions contradict the liberal order championed by the U.S, further legitimizing China’s assertive territorial claims.

While Trump remains ‘confident’ China will not invade Taiwan during his presidency, China buttresses the 7.2% increase in its defense budget by upgrading its strategic buildup, with Taiwan at the center of its modernization efforts, to conduct coercive missions and demoralize Taiwan’s defenses against the backdrop of growing U.S-Taiwan ties.

Strategic Significance of Taiwan

Taiwan would provide China with a geographic wedge as a buffer zone between Philippines and Japan (key US allies) and thereby interdict critical shipping lanes that would otherwise be hindered by an ally-controlled first island chain. While the U.S-controlled Guam and the Northern Mariana Islands lie in the second island chain, it is excessively porous and easily penetrable, making Taiwan crucial for US’ strategic positioning in the region.

Taiwan’s economy is the 22nd largest economy in the world with 65% of the global semiconductor production and 90% of the sophisticated chips built in the island. Undoubtedly, China’s takeover of Taiwan would boost Beijing’s economy while disrupting the global supply chain which would be detrimental to U.S interests. A Chinese blockade of Taiwan would incur $2.5 trillion  annual global economic losses as the unavailability of Taiwanese chips would adversely impact e-commerce and logistics.

The Taiwan strait is a vital maritime artery for global shipping as it is home to three of the 10-largest shipping fleets, including Evergreen Marine and Wan Hai Lines and more than a fifth of global maritime trade transited this trade route in 2022, underscoring its significance for maritime trade and logistics.

The Taiwan Strait connects South and East China Seas being strategically positioned between Yangtze River Delta and Pearl River Delta Economic Zones where China’s most productive manufacturing centers are located. It is a ‘strategic thoroughfare’ that integrates Yellow, East, and South China Seas into a unified maritime space, underpinning the geostrategic and geospatial underpinnings of Beijing’s reunification with Taiwan. It would inevitably provide China’s defense parameter with immense strategic depth into the Pacific, reinforcing its strategic leverage against adversaries over Miyako Strait to Taiwan’s north and the Bashi Channel to Taiwan’s south, maximizing its deterrence abilities.

Taiwan’s democracy and open political system are also existential threats to China’s authoritarianism as it stands as an exemplar of a prosperous and thriving society; an ally that the U.S cannot afford to let succumb to an aggressive autocracy. More importantly, with the loss of Taiwan, the U.S allies will be compelled to contemplate whether to accommodate China or hedge against it by bolstering their defenses which will undermine U.S credibility, resulting in diminished U.S influence and heightened global insecurity.

Looking Ahead

Taiwan’s polity has weakened the desire for unification among the Taiwanese public while support for independence has dramatically risen amid the dispute. As the Malacca Dilemma poses a strategic vulnerability to vital Chinese sea lines of communication in the Indian Ocean, the possibility of China’s war on Taiwan becomes remote but cannot be ruled out.

Nonetheless, the U.S cannot remain sanguine about the emerging regional scenario as China is also expanding its military footprint which will erode deterrence and intensify geopolitical tensions. As China promotes indigenization and self-sufficiency, U.S sanctions against China will also render futile, emboldening provocative acts of brinkmanship against Taiwan. With the status quo now under increasing strain, Beijing, Teppei and Washington are propelled to recalibrate their strategic calculus to navigate this security dilemma, effectively.