Unfruitful ignition

Beijing appears to be rehearsing for an attack on Taiwan islands that sit around 80 miles off the coast of southern China, where the East China Sea blends into the South China Sea.

Taiwan, home to 23 million people, has been ruled at various times by Dutch colonisers, China's Qing emperors, and Imperial Japan. In 2019, Xi Jinping gave a speech in which he vowed to 'reunify' Taiwan with the mainland, calling it the "great trend of history." Xi opened the door to peaceful reunification but added: "We make no promise to abandon the use of force, and retain the option of taking all necessary measures."

The current conflict between Taiwan and China has been triggered by Nancy Pelosi's visit to Taiwan on August 3, 2022. Pelosi, the Speaker of the US Congress, became the highest-ranking US official to visit the island since 1997. It may be recalled that more than 30 years ago in 1991, US Representative Nancy Pelosi angered China's government by showing up in Tiananmen Square and unfurling a banner honouring dissidents killed in the 1989 protests, as per a report by Reuters.

Pelosi's visit came as part of a tour to US' allies in the region, designed to show America's support in the face of increased aggression from Beijing. But the visit came at an opportune time for Xi, who is preparing to be named president for a historic third term in the autumn, and views 'reunifying' Taiwan as his destiny. To Pelosi's visit, he has reacted with an unprecedented show of strength, vowing that "those who play with fire will die by it". Xi ordered six days of military drills to take place around Taiwan that will effectively blockade the island and encroach into its territorial waters.

Context

Historians claim that the island first appeared in Chinese records in AD 239 when an emperor sent an expeditionary force to explore the area — a fact Beijing uses to back its territorial claim. After a relatively brief spell as a Dutch colony (1624-1661), Taiwan was administered by China's Qing dynasty from 1683 to 1895.

According to a BBC report, from the 17th Century, significant numbers of migrants started arriving from China, often fleeing turmoil or hardship. Most were Hoklo Chinese from Fujian (Fukien) province or Hakka Chinese, largely from Guangdong. Their descendants are now by far the largest demographic group on the island.

In 1895, Japan won the First Sino-Japanese War, and the Qing government had to cede Taiwan to Japan. After World War-II, Japan surrendered and relinquished control of territory it had taken from China. The Republic of China (ROC) — one of the victors in the war — began ruling Taiwan with the consent of its allies — the USA and the UK.

But in the next few years a civil war broke out in China, and the then-leader Chiang Kai-shek's troops were defeated by Mao Zedong's Communist army. Chiang, the remnants of his Kuomintang (KMT) government, and their supporters — about 1.5m people — fled to Taiwan in 1949. This group, referred to as Mainland Chinese, dominated Taiwan's politics for many years though they only account for 14 per cent of the population. Chiang established a government in exile in Taiwan which he led for the next 25 years.

Chiang's son, Chiang Ching-Kuo, allowed more democratisation after coming to power. He faced resistance from local people resentful of authoritarian rule, and was under pressure from a growing democracy movement. President Lee Teng-hui, known as Taiwan's 'father of democracy', led constitutional changes, which eventually made way for the election of the island's first non-KMT president, Chen Shui-bian, in 2000. Chen and his party — the Democratic Progressive Party (DPP) — had openly backed Taiwan's 'independence'. According to a BBC report, in 2005, a year after Chen was re-elected in 2004, China passed a so-called anti-secession law, stating China's right to use 'non-peaceful means' against Taiwan if it tried to 'secede' from China.

US Policy on Taiwan

Though Taiwan has its own constitution, democratically-elected leaders, and about 3,00,000 active troops in its armed forces, the sovereign status of Taiwan is still ambiguous. Chiang's ROC government-in-exile at first claimed to represent the whole of China, which it intended to re-occupy. It held China's seat on the United Nations Security Council and was recognised by many Western nations as the only Chinese government. But by the 1970s, some countries began to argue that the Taipei government could no longer be considered a genuine representative of the hundreds of millions of people living in mainland China. In 1971, the UN switched diplomatic recognition to Beijing and the ROC government was forced out. In 1978, China also began opening up its economy. Recognising opportunities for trade and the need to develop relations, the US formally established diplomatic ties with Beijing in 1979. Despite having all the characteristics of an independent state and a political system that is distinct from China, Taiwan's legal status remains unclear.

In a statement dated May 28, 2022, on US Relations with Taiwan, the US Department of State said, as a leading democracy and a technological powerhouse, Taiwan is a key US partner in the Indo-Pacific. Though the United States does not have diplomatic relations with Taiwan, it has a robust unofficial relationship. The United States and Taiwan share similar values, deep commercial and economic links, and strong people-to-people ties, which form the bedrock of friendship and serve as the impetus for expanding US engagement with Taiwan.

Through the American Institute in Taiwan (AIT), a non-governmental organisation mandated by the Taiwan Relations Act to carry out the United States' unofficial relations with Taiwan, USA's cooperation with the island nation continues to expand. Taiwan has become an important US partner in trade and investment, health, semiconductor and other critical supply chains, investment screening, science and technology, education, and advancing democratic values.

The United States' approach to Taiwan has remained consistent across decades and administrations. It has a longstanding one-China policy, which is guided by the Taiwan Relations Act, the three US-China Joint Communiqués, and the Six Assurances. The USA opposes any unilateral changes to the status quo from either side; it does not support Taiwan's independence, and expects cross-Strait differences to be resolved by peaceful means. Consistent with the Taiwan Relations Act, the United States makes available defence articles and services as necessary to enable Taiwan to maintain a sufficient self-defence capability. From the above statement, it is very clear that the USA's official stand on the 'One China Policy' has remained unchanged and the USA does not support Taiwan's independence. In this context, the unwarranted official visit of Nancy Pelosi is not consistent with the stated US policy on Taiwan and China.

However, a recent move in the US Congress may change the decade-long Taiwan policy. It is reported that the White House has tried to delay the Taiwan Policy Act that aims to upgrade ties with the island by designating it as a major 'non-NATO ally'. Observers say the bill "would overturn Sino-US relations" and could prompt a stronger response from Beijing than House Speaker Pelosi's visit to Taipei, reports South China Morning Post.

China's white paper

According to Global Times, China has released a white paper on Taiwan question and reunification, which outlines an irreversible historical process, stronger capability, and rock-solid resolution in a new era. On August 10, following the tensions triggered by US House Speaker Nancy Pelosi's provocative visit to Taiwan island, the Taiwan Affairs Office of the State Council and the State Council Information Office of China published a white paper titled 'The Taiwan Question and China's Reunification in the New Era'.

The previous two white papers on the Taiwan question were released in 1993 and 2000, and it is claimed that publishing the latest one is necessary as the situation has deeply changed in past decades, and the document has also further clarified in what circumstances the Chinese mainland will be forced to use the military option. The previous editions were: 'The Taiwan Question and Reunification of China' (1993) and 'The One-China Principle and the Taiwan Question' (2000).

Analysts said the white paper's release is a warning to Taiwan authorities as well as external forces, as the mainland is much stronger to solve the Taiwan question under the new circumstances. The white paper included new content based on the situation of the new era, including specific warnings to the secessionist Democratic Progressive Party (DPP) that currently rules the island, by saying its secessionist actions are obstacles that "must be removed". It also highlighted the US' dangerous role in interrupting China's reunification process. The document provides more clear guidelines for the post-reunification governance over the island, and why it will benefit the international community.

"We are one China, and Taiwan is a part of China. This is an indisputable fact supported by history and the law. Taiwan has never been a state; its status as a part of China is unalterable," says the white paper, noting that the CPC is committed to the historic mission of resolving the Taiwan question and realising China's complete reunification.

"Never before have we been so close to, confident in, and capable of achieving the goal of national rejuvenation. The same is true when it comes to our goal of complete national reunification," it added. "Use of force would be the last resort taken under compelling circumstances. We will only be forced to take drastic measures to respond to the provocation of separatist elements or external forces should they ever cross our red lines," the white paper said.

Like the previous editions, the third white paper once again stressed that peaceful reunification and "one country, two systems" are China's basic principles for resolving the Taiwan question and the best approach to realising national reunification. It says the differences in a social system in mainland and Taiwan are "neither an obstacle to reunification nor a justification for secessionism."

Experts said that compared with the previous two editions, the latest white paper highlights the "national development and progress-led reunification," and clarifies that the most critical factor determining the general trend of reunification is China's development and progress, which suggested that the mainland's ability to solve the Taiwan question is getting stronger, reports Global Times.

Economic and strategic importance

In addition to political and emotional importance, Taiwan, which sits around 80 miles off the coast of southern China, where the East China Sea blends into the South China Sea, is strategically very important to China. As per a Bloomberg report, 'The World Is Dangerously Dependent on Taiwan for Semiconductors', Taiwan, which China regards as a province, is being courted for its capacity to make leading-edge computer chips by Taiwan Semiconductor Manufacturing Co.(TSMC) — the world's largest foundry of chips for Apple Inc. smartphones, artificial intelligence, and high-performance computing.

TSMC has emerged over the past several years as the world's most important semiconductor company, with enormous influence over the global economy. With a market cap of around USD 550 billion, it ranks as the world's 11th-most valuable company. Its dominance leaves the world in a vulnerable position, however. As more technologies require chips of mind-boggling complexity, more is coming from this one company, on an island that's a focal point of tensions between the US and China.

Analysts say it will be difficult for other manufacturers to catch up in an industry that requires hefty capital investments. The situation is similar in some ways to the world's past reliance on Middle Eastern oil, with any instability on the island threatening to echo across industries. Companies in Taiwan, including smaller makers, generated about 65 per cent of global revenues for outsourced chip manufacturing during the first quarter of this year. TSMC generated 56 per cent of the global revenues, reports The Wall Street Journal.

It may also be noted that though Chinese authorities suspended imports of Taiwanese citrus fruits and fish, and exports of sand from Taiwan, Beijing's apparent attempt at economic sanctions, however, conspicuously left Taiwan's most valuable export untouched — semiconductors. That is most likely because China depends on Taiwan's exports of the critical components almost as much as the island does itself, reports Al Jazeera.

Options before the USA

The Taiwan crisis has put the USA in a fix. With nearly one trillion-dollar debt to China and huge investments by US companies in China's manufacturing sector, the USA cannot afford to engage in any form of direct conflict with China in an unfamiliar South and East China sea far away from mainland USA. The historical defeat in the Vietnam war has definitely not been forgotten by the military strategists. Meanwhile, USA-based transnational company Apple has told Taiwanese suppliers to label products as 'Made in China'.

Analysts believe that the USA may, at best, resort to the strategy they have been following in the Russia-Ukraine war. instead of getting directly involved, they might supply sophisticated and expensive arms to Taiwan to resist Chinese aggression. It may be mentioned that till now the US has supplied nearly USD 10 billion worth of weapons to Ukraine.

India's silence

India does not have formal diplomatic ties with Taiwan yet, as it follows the One-China policy. However, as per an Indian Express report, during the then Chinese premier Wen Jiabao's visit to India in December 2010, India did not mention support for the One-China policy in the joint communique. India and Taiwan started negotiations for a Free trade Agreement in December 2021. India wants to gain from Taiwan's expertise in semiconductor manufacturing in order to set up a domestic facility. The FTA talks are centered on the mega project which, if materialised, will make India the second hub of Taiwanese semiconductor manufacturers after the USA, and the plans may lose momentum amid Chinese provocation.

Conclusion

Nancy Pelosi's visit to Taiwan has given the much-needed excuse to Xi to fulfil his dream of One China by annexing Taiwan. China claims to have historical evidence in its favour. And most importantly, as the recent white paper highlighted, "Today, China has grown into the world's second-largest economy. With significant growth in its political, economic, cultural, technological, and military strength, there is no likelihood that China will allow Taiwan to be separated again." The USA's Ukraine strategy may not work in Taiwan.

To date, India has followed the 'watch and wait' policy on the recent developments. The world is watching. If the crisis continues, India will face a severe shortage of semiconductor supplies. In FY 2021-22, India imported goods worth Rs 46,515 crores. The major imports were: Electrical machinery (27.7 per cent), plastic and its articles (17.6 per cent), nuclear reactors (17.3 per cent), organic chemicals (15.9 per cent), and iron and steel (4.1 per cent). To avoid any major supply disruption, policymakers should identify alternative supplies as early as possible.

Views expressed are personal