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Next Point of Tension – Taiwan

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PHOTO: Taiwan Semiconductor Manufacturing Company (TSMC) has recently garnered special attention as the West begins to shift supply chains from China through the Taiwan Strait. Photo taken in the Science Park in Xinzhu, Taipei, Taiwan. SOURCE: Getty Images
PHOTO: Taiwan Semiconductor Manufacturing Company (TSMC) has recently garnered special attention as the West begins to shift supply chains from China through the Taiwan Strait. Photo taken in the Science Park in Xinzhu, Taipei, Taiwan. SOURCE: Getty Images

Why is Taiwan the current focus of global politics? Because on January 13, the country is set to hold its next presidential elections. Events are unfolding rapidly despite the seemingly new search for agreements between Beijing and Washington, announced in mid-November in San Francisco during a meeting between U.S. President Joe Biden and Chinese President Xi Jinping. Economics is steering political trends. China is striving for self-sufficiency and access to cutting-edge technologies. The U.S. aims to significantly reduce the relative importance of economic ties with China, openly and vigorously supporting Taiwan, including by shifting microelectronics purchases from China to Taiwan. The Chinese military increasingly crosses the so called middle line in the strait between Taiwan and the mainland. In Taiwan's society, there's a growing number of pragmatists who like the idea of closer ties with China. Beijing is actively promoting such ideas ahead of the elections.


In early December, Taiwan reported rare nocturnal military activity by China around the island. This included aircraft crossing the sensitive middle line of the Taiwan Strait. Local media linked this activity to the upcoming elections in Taiwan on January 13, 2024.

The Ministry of Defense of Taiwan had reported similar situations several times in November and early December. However, what happened on the night of December 7-8 local time was indeed extensive. Approximately thirty aircraft were in the air, crossing the middle line of the Taiwan Strait, including Su-30, J-10, and J-11 fighters, as well as H-6 nuclear bombers and early warning aircraft. They were spotted near the northern and central areas opposite the island, as well as southwest of it. Essentially, the entire airspace between the island and the mainland became a theater of exercises, as Beijing calls this activity.

Simultaneously, Chinese military ships conducted demonstrative patrols in the strait. Previously, the middle line of the strait was considered a virtual barrier between the two sides, but now Chinese aircraft and military ships regularly and quite demonstratively cross it. Beijing typically refrains from commenting on these actions. However, this activity is not entirely new. Over the last four years, Taiwan has increasingly complained about military patrols and exercises by Chinese forces near the island, particularly in the strait. China, in turn, considers the island its territory and reacts strongly through diplomatic channels to any official ties with Taipei.

All of this is happening against the backdrop of restrictions imposed by the U.S. and EU on China's access to advanced technologies, particularly in microelectronics.


PHOTO: Taiwanese soldiers on regular training in Xinzhu. Source: Getty Images


Everyone Has Their Chip

In the last few years, China has not only increased its pressure on Taiwan but has also strengthened its position within BRICS – the group of developing countries, including Brazil, Russia, India, China, and South Africa. China seeks to expand this group and enhance its influence on the Global South. At the same time, Chinese companies have been identified as violators of anti-Russian sanctions imposed following Russia's full-scale invasion of Ukraine in February 2022. Chinese companies have directly featured in recent rounds of sanctions and earlier too.

Moreover, the EU and the U.S. faced significant challenges due to the economic crisis caused by COVID-19 in 2020-2021. The disruption of electronic component supply chains led to halts in many industries in both Europe and the U.S. For this reason, both the U.S. and the EU initiated programs to strengthen independence in the production of microchips and other microelectronics. Many supply programs were shifted from mainland China to Taiwan. This shift has visibly irked Beijing.

This change in chip and microelectronics procurement patterns occurred against the backdrop of technological restrictions on China by developed countries due to China's involvement in circumventing anti-Russian sanctions and its attempts to acquire the latest dual-use technologies. At the same time, these technologies are being diligently developed by Taiwan. Currently, the country is vying for leadership in mastering 2-nanometer class chip technologies – a phenomenon that is quite challenging to comprehend.

The noticeable drift of technologies and the flow of massive orders to Taiwan evidently irritate China and stimulate it towards greater activity, including diplomatic, technological, and military. The situation appears as if there is a competition for an island that is indeed the key to the latest microelectronics technologies and the global microelectronics market as a whole.


This Has No Simple Solution

Certainly, the ongoing escalation hasn't escaped the attention of the leaders of the world's largest nations. In mid-November, on the sidelines of the Asia-Pacific Economic Cooperation summit in the suburbs of San Francisco, talks took place between Chinese leader Xi Jinping and U.S. President Joe Biden. It was the highest level of negotiations, but expectations were not too high due to the considerable load of issues. The outcome made it clear that the most significant aspect was just the fact of direct communication. However, talk of a real easing of tensions was not on the table. This became apparent shortly after when Beijing extended a series of military demonstration missions mentioned somewhat earlier.

Agreements were hardly possible in principle at this point. The day before the summit in November, Beijing implemented a new regime for the export of critically important metals. This unfriendly move towards Washington may have been in response to restrictions on the supply of high-tech goods to China, particularly those related to artificial intelligence and powerful computing systems. Washington imposed these restrictions because China actively employs such technologies for military purposes.

Both sides often repeat the same words about negotiations and the impossibility of a significant reduction in economic ties. And quite interesting thoughts on this can be heard from specialized researchers. For instance, Wendy Cutler, Vice President of the Institute of Asian Society Policy and former U.S. Trade Representative in Asia, stated during a workshop that Chinese imports to the U.S. are decreasing as the U.S. strengthens economic relations with other Asian exporting countries. China also aims to become more economically self-sufficient and is establishing new ties with African and Latin American countries. Ms. Cutler insists that interdependence exists, but both sides are persistently seeking something else and trying to reduce their dependence on each other. And this is a key trend.

So, what are the strategies of key players? At the same workshop, Dan Wan, an invited researcher from Yale Law School and an expert on Beijing's technological ambitions, insisted that China's strategy towards the U.S. is quite clear and simply defined. In his opinion, this strategy is to increase China's self-sufficiency from the rest of the world while simultaneously increasing the world's dependence on China. However, Dan Wan couldn't articulate the U.S. strategy towards China. Though, undoubtedly, such a strategy exists.

This strategy probably includes active support for Taiwan, evident in a significant security funding package that is struggling to pass through the U.S. Congress. This strategy likely involves strengthening ties with Vietnam and other major countries in Southeast Asia. It probably includes activity in the AUKUS direction – the trilateral security group involving Australia, the U.S., and the United Kingdom.

Nevertheless, Taiwan finds itself actively doing its own homework.


PHOTO: Presidential candidate for Taiwan, Lai Ching-te (centre), from the ruling Democratic Progressive Party (DPP). Source: Getty Images.


Kuomintang on the Horizon

Currently, Taiwan is under the leadership of President Tsai Ing-wen and the Democratic Progressive Party (DPP), which she represents. However, Tsai Ing-wen is in her second consecutive term, having been in office since 2016, and cannot be re-elected.

Instead, the DPP nominated Vice President Lai Ching-te as its presidential candidate in March of this year. The nominee for vice president is Hsiao Bi-khim, who until recently served as Taiwan's representative in the United States.

It's worth noting that there is no official embassy of Taiwan in the U.S. since Washington established diplomatic relations with the People's Republic of China in 1979, recognizing Beijing as the sole legitimate government of China. Since then, relations between Taiwan and the United States have become unofficial and informal. However, the Taiwan Relations Act (TRA) allows the United States to maintain relations with the people of Taiwan and its government, although the name of such a government is not specified in the law. Therefore, Taiwan's representation in the U.S. serves as a potent channel of cooperation, essentially performing almost the same functions as an embassy.

While serving as Taiwan's representative in the U.S., Hsiao Bi-khim stated in an interview with the Associated Press: "Everything we are doing now is aimed at preventing a repetition of the pain and suffering of the Ukraine tragedy on our script in Taiwan. Therefore, ultimately, we seek to restrain the use of military force. But in the worst-case scenario, we understand that we must be better prepared."

So, the presence of Ms. Hsiao Bi-khim as the vice-presidential candidate is a significant signal regarding the potential winners of the elections.


PHOTO: Presidential candidate from the Kuomintang (KMT), Hou Yu-ih, speaks during a press conference. Source: Getty Images.


However, if sympathies for the DPP and its presidential candidates remain at a practically constant and fairly high level, hovering just above 41%, according to polls, their closest competitors from the Kuomintang party have only slightly over 31%. Although sympathies for the Kuomintang are gradually increasing.

Kuomintang has nominated Hou Yu-ih, the mayor of New Taipei and a former high-ranking police official, as its presidential candidate, and Jaw Shaw-kong, an influential parliamentarian, as vice president.

The Kuomintang, or Chinese Nationalist Party, played a pivotal role in Taiwan's origins as a state. The Kuomintang once led the resistance against the Communist Party of China on the mainland but was forced to retreat. Even now, the Kuomintang is the largest opposition party in the parliament, occupying right and right-centrist positions. The Kuomintang has numerous achievements in the economy, notably the "Taiwanese Miracle." However, it also has a long period of authoritarianism that ended only 30 years ago. While the party pursues nationalist ideals, it is not a proponent of a swift reunification with mainland China. Nevertheless, its DNA is threaded with ideas of inevitable reunification, the danger of overly close ties with the U.S., and the absolute effectiveness of purely diplomatic steps.

Many media outlets explicitly state that Taiwan's main opposition party, the Kuomintang, traditionally maintains close ties with Beijing and has promised to resume active dialogue with China if victorious in the elections. In particular, Kuomintang Vice Chairman Andrew Hsia visited the PRC on December 14 to meet with the local Taiwanese community, just 30 days before the elections. Reuters, citing its own sources, reported that Hsia is likely to meet with representatives of Taiwan Affairs Office, a state agency of the PRC.


PHOTO: Presidential candidate from the Taiwan People's Party (TPP, Third range by the polls), Ko Wen-Je, speaks during an interview in New Taipei City on December 12, 2023. Ko Wen-Je has sought to present himself as an alternative to more recognized leaders in Taiwan, offering what he calls a "pragmatic" approach to relations with China, which may appeal to some young voters. It's a certain alternative to the Kuomintang, but not its stance. Source: Getty Images.


It is worth adding that in early December, Taiwanese intelligence agencies disseminated information about a working meeting led by the fourth-ranking leader of the Communist Party of China, Wang Huning, who also serves as the deputy head of Beijing's Central Leading Group on Taiwan Affairs under President Xi Jinping. Reuters, citing anonymous sources in the Taiwanese security service, reported that high-ranking officials from various departments, including China's Propaganda Department, Ministry of State Security, Ministry of National Defense, and Taiwan Affairs Office, participated in the meeting. It appears the purpose of the gathering was to exert influence on the presidential elections in the island nation.

Another factor to consider is the history of the accelerated absorption of Hong Kong by the PRC. This case made many realize what the proposed "One Country, Two Systems" course actually signifies. Perhaps someone will attempt to compare the events of 25 years ago, the honeymoon period between Beijing and Hong Kong, with what happened 20 years later.

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