Stumbling Island: 5 Reasons Why Taiwan Is So Important to China and the US

Supporters "independent course" with posters "Taiwan is not China" welcome Nancy Pelosi, Taipei.

Independent Dealers with “Taiwan Not China” banners greet Nancy Pelosi, Taipei.

A photo: REUTERS

1. Unfinished Civil War

In 1946-1949 in China, the ruling Kuomintang Party, led by Chiang Kai-shek, waged an armed struggle against the Communist Party for power in the country. The civil war on the mainland ended in 1949 with the victory of the Communists, who proclaimed the People’s Republic of China (PRC). Supporters of the Kuomintang evacuated to Taiwan and a number of islands in the Taiwan Strait, where the personal regime of Chiang Kai-shek was established, who ruled under martial law.

After the death of Chiang Kai-shek in 1975, the domestic political climate gradually softened, and martial law was lifted in 1987. A number of democratic reforms have been carried out in the Republic of China (ROC – the political self-name of Taiwan).

In 1988, the PRC set a course for peaceful unification with Taiwan based on the principle of “one country, two systems.” Taiwan proposed in September 1990 its own concept – “one country – two territories”, which assumed the preservation of the sovereignty of the ROC, which is unacceptable for the PRC. At a meeting of representatives of the PRC and Taiwan in 1992, the parties agreed to recognize the principle of one China, reserving the right to a different interpretation of this principle.

However, the Democratic Progressive Party (DPP), which led Taiwan in the 2000s, declared the island a sovereign state, and contacts with China were interrupted. In 2008, the Kuomintang Party returned to power, the new leadership stepped up economic cooperation with China. In 2016 and 2020, the DPP leader Tsai Ing-wen, who opposes integration with the PRC, won the election of the head of the administration, her party has a majority in Taiwan’s parliament.

Until 1971, the ROK represented China in the UN, including in the Security Council. Today, more than 170 countries around the world, as well as the UN, legally recognize the position of the Chinese government on “one China”, according to which Taiwan is an integral part of China. Only a little over ten countries recognize the CD, mostly small and dwarf states like Belize, Guatemala, Nauru and Palau.

The United States severed diplomatic relations with Taiwan and officially recognized mainland China only in 1979, but immediately concluded an agreement with Taipei on cooperation, including military cooperation.

Taipei.  Nancy Pelosi and Taiwanese President Tsai Ing-wen speak to reporters in front of a portrait of Chiang Kai-shek.

Taipei. Nancy Pelosi and Taiwanese President Tsai Ing-wen speak to reporters in front of a portrait of Chiang Kai-shek.

A photo: REUTERS

2. America wants to remain “king of the hill”

Washington defines China as an extremely dangerous geopolitical opponent, topping America’s list of adversaries. China is a “revisionist” power (along with Russia) that is trying to “shape a world inconsistent with US interests and values.”

Now China is seen as a state that seeks to remove the United States from its position in the world and is expanding its ability to do so.

China defines the new era as the era of “strategic rivalry” between the great powers. Beijing’s Made in China 2025 strategy launched in 2017 aims to make China a leader in ten high-tech industries.

In this context, control over Taiwan, a territory where critical capacities for the production of microelectronics and other high-tech industries are concentrated, is critically important for China and the United States.

Among the Taiwanese, there are those who yearn for final unification with China.

Among the Taiwanese, there are those who yearn for final unification with China.

A photo: REUTERS

3. Taiwan’s semiconductor industry is a world leader

Based in Taiwan, UMC and TSMC produce more than half of the world’s semiconductors: boards, processors, electronic components and microcircuits. In 2020, more than 60% of the revenue from all global semiconductor production came from Taiwanese companies. At the same time, TSMC alone received 54% of all global revenue.

TSMC Chairman Mark Liu said on Nancy Pelosi’s visit to Taiwan that economies on both sides of the Taiwan Strait would fall into chaos if China invaded Taiwan. In his opinion, TSMC’s factories will be put out of action in the event of a Chinese attack, as sophisticated manufacturing facilities depend on real-time communication with the outside world, with Europe, the United States and Japan. In addition, China accounts for 10% of TSMC’s business.

The Chinese consider Taiwan an integral part of the country.  In the photo - the outlines of China with Taiwan on a giant globe in Shanghai.

The Chinese consider Taiwan an integral part of the country. In the photo – the outlines of China with Taiwan on a giant globe in Shanghai.

A photo: REUTERS

4. 80% of world trade passes through the Taiwan Strait

Even a minor escalation of the conflict between the US and China over Taiwan could threaten global supply chains, warns Bloomberg. The agency calls any action against the island a “strike on global shipping.” The Taiwan Strait is the main route for shipping from China, Japan, South Korea and Taiwan to the west – through it, goods made in Asian factories are delivered to the markets of Europe, the USA and other countries. According to the agency, in 2022, 88 percent of the world’s largest merchant ships and 48 percent of the 5.4 thousand container ships passed through the strait.

Chinese strategists are focused on the following potential crisis scenario: Taiwan threatens to declare independence, and China responds with force. The United States cuts off oil supplies to China through the South China Sea. And then – an escalation according to an unpredictable scenario? This is part of Beijing’s strategic rationale for its “Nine-Dotted Map” and its assertion of sovereignty over the waters of the South China Sea.

Beijing.  A retiree examines a newspaper article about Pelosi's visit to Taiwan at a booth.

Beijing. A retiree examines a newspaper article about Pelosi’s visit to Taiwan at a booth.

A photo: REUTERS

5. Election flexing

The 20th Congress of the Chinese Communist Party (CCP) will be held in Beijing in October. The 2,300 delegates will represent approximately 90 million members of the CCP. The congress will elect a Central Committee, which in turn will appoint the members of the Politburo and its Standing Committee, the highest decision-making body in the PRC. The most important expected decision of the congress is the re-election of Xi Jinping as the chairman of the PRC for a third term (which will practically make him the leader of the country for life). The official media put Comrade Xi on a par with Mao Zedong and Deng Xiaoping, describing him as “hard as a rock.” And old woman Pelosi’s provocative flight to Taiwan is, of course, seen as a demonstrative image spitting in the direction of the current leader of China.

But in the United States in November, there are midterm congressional elections, which the Democrats are likely to lose. Therefore, the Democratic speaker, if, contrary to loud statements, quietly canceled her visit to the island, she would also “lose face” and become the object of severe attacks from the Republicans.


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