Taiwan’s precarious autonomy in the shadow of China

On 20 May 2024 Lai Ching-te will take office as the new president of Taiwan, at a time of great tensions with mainland China. It is also just six months before the US presidential elections whose outcome could influence Taiwan’s political future.

Lai’s election victory was historic in that Taiwan will see, for the first time, the same party — in this case the Democratic Progressive Party (DPP) — lead the country for three consecutive terms of office.

Taiwan is a small island, about the size of Switzerland, about 160 km off the coast of southeastern China. Its population of 24 million is slightly less than that of Australia.

It is an advanced economy. Using gross domestic product (GDP) per capita as a comparison tool, Taiwan’s $77,000 USD is about three times that of China.

It is also a leading player in global supply chains for high technology products, especially semiconductors, produced by Taiwan Semiconductor Manufacturing Company (TSMC).

Two Chinas across a narrow strait

From 1895 until the end of World War Two in 1945, Taiwan was a Japanese colony. After the war, the government of China at the time, under the leadership of Chiang Kai-shek’s Kuomintang party fled to Taiwan after it lost power to Mao Zedong’s Chinese Communist Party. Ever since, Taiwan has since been officially known as the Republic of China while mainland China is the People’s Republic of China.

Over the years, Taiwan transitioned from authoritarianism to democracy. If it were universally acknowledged as a sovereign country it would be the tenth most democratic jurisdiction in the world, and the leading democracy in Asia, according to the Economist Intelligence Unit’s Democracy Index 2023. By contrast, China is classed as an “authoritarian regime, ” and is ranked 148th.

But since 1949, Taiwan has functioned with de facto independence; it has its own government, military and currency. Yet the People’s Republic of China has always insisted that Taiwan is a part of the PRC.

China also insists that other countries respect its “One China” principle. Thus, only 12 countries recognize Taiwan as an independent country. They have diplomatic relations with Taiwan rather than the People’s Republic of China. These are mainly small nations in Latin America and the Pacific Islands.

Not surprisingly, the status of Taiwan has become a focal point for the great power rivalry between China and the United States.

Most Western countries, in contrast, have diplomatic relations with Beijing, and maintain representative offices in Taipei. The United States maintains unofficial relations with the people of Taiwan through the American Institute in Taiwan, a private nonprofit corporation, which performs US citizen and consular services similar to those at embassies.

A diplomatic dance

Back in 1992, representatives of both Taiwan and China met and ironed out some conditions that could allow for relations across the Taiwan Strait. This became known as the 1992 Consensus. While it broadly committed both to the principle of “One China,” each interprets that differently; The People’s Republic sees Taiwan as a renegade state that must return at some point in the future, while Taiwan values ​​its own autonomy.

Much to the chagrin of Beijing, the DPP does not accept the “1992 Consensus.”

Thus, there has been a dramatic deterioration in relations in recent years, especially since President Tsai’s presidency overlapped with that of the very assertive Chinese leader, Xi Jinping.

Many commentators now argue that the Taiwan Strait is the most dangerous region in the world.

China believes Taiwan must be unified with the mainland under the banner of its “One China” principle, and China’s claims to Taiwan are only intensifying in tandem with its growing economic power. The impatience of Xi Jinping was palpable in 2021 when he said that the “Taiwan issue cannot be passed on from generation to generation.”

Autonomy versus subjugation

Needless to say, Xi’s upping the ante has only exacerbated tensions across the Taiwan Strait — as have Beijing’s interference in the affairs of Hong Kong and the consequent deterioration in its freedom and human rights.

Hong Kong’s system of “one country, two systems” was once considered to be a possible model for Taiwan. But this is no longer the case.

Today, less than 10% of the Taiwanese people are in favor of unification with China. The majority prefer to keep the status quo. While feelings for independence are strong, the Taiwanese people are concerned that any move to independence would provoke Beijing — hence the widespread support for the status quo.

For its part, the United States has “acknowledged” (but not supported) the “One China” positions of both Beijing and Taipei. But the United States does not recognize Beijing’s sovereignty over Taiwan.

Nor does it recognize Taiwan as a sovereign country. According to official US policy, Taiwan’s status is unsettled, and must be resolved peacefully.

The United States stands by.

Back in 1979 when the United States recognized the People’s Republic of China and established diplomatic relations with it as the sole legitimate government of China, it also implemented the Taiwan Relations Act.

This requires the United States to have a policy “to provide Taiwan with arms of a defensive character” and “to maintain the capacity of the United States to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.”

When Chiang Kai-shek and his KMT retreated to Taiwan in 1949, Taiwan was poorer than virtually all of the provinces of mainland China. But the Taiwanese economy would grow dramatically thanks to US support, an increasingly well-educated and industrious workforce, a strong entrepreneurial spirit and the legacy of infrastructure and institutions from Japan’s colonization of the island.

Today, Taiwan’s successful democratic capitalism is a strategic asset of the West. Its economy is a lynchpin in the global economy’s high-tech supply chains. In a world where democracy seems increasingly under threat, it is a beacon of democratic hope and inspiration. Taiwan also offers proof that democracy is not inconsistent with Chinese culture.

Taiwan’s position in the so-called “first island chain,” geographically located between US allies Japan and the Philippines, is crucial to Washington’s foreign policy in the region at a time when China is trying to evict the United States from East Asia and behaving aggressively in the South China Sea.

China casts a big shadow.

The loss of Taiwan would undermine the credibility of the United States as an ally of Japan, Korea, the Philippines and Australia. If China took control of Taiwan, it could be freer to project power in the western Pacific and rival the United States.

While US official policy towards Taiwan has remained unchanged over the years, the United States has been deepening its partnership with Taiwan in tandem with Xi Jinping’s assertive attitude over the past decade, thereby provoking Beijing’s anger. This has included increased arms sales and military training, and the visits of high-level US Congress representatives, which Beijing interprets as conferring political recognition on Taiwan.

US President Joe Biden has indicated four times that he would use the military to defend Taiwan if China ever attacked the island. The US Congress has a strong resistance to the idea of ​​sacrificing democratic Taiwan to the increasingly authoritarian Beijing.

And as recently as 20 April 2024 it passed a series of foreign aid bills that allocated $8 billion for Taiwan and other Indo-Pacific allies, along with much larger sums for Ukraine and Israel.

There is much speculation about the future of China-Taiwan relations by geopolitical analysts.

According to one school of thought, China faces a narrow window of opportunity, in light of its deteriorating economic prospects, to subjugate Taiwan. Thus many are alert to the possibility of China placing extreme pressure on Taiwan, including through a possible invasion over the coming years.

Others argue that Russia’s invasion and never-ending war with Ukraine make China hesitant to contemplate a similar operation in Taiwan. Taiwan’s mountainous geography and relatively shallow seas on the west coast would make an invasion much more challenging.

Is invasion a possibility?

The close location of US forces in Japan and the Philippines means that China would inevitably bump into the United States. And because China’s economy is so tightly integrated into Western-led supply chains, the cost of Western sanctions on China would be much greater than the sanctions on Russia.

The most likely scenario is that China will seek to subjugate Taiwan without overt military action, notably by cyber attacks, coercion, information warfare, harassment and threats. All things considered, with or without an invasion or direct military attacks, the Taiwan Straits will likely remain Asia’s biggest hot spot and occupy the attention of strategic planners for many years to come.

So are the Taiwan Straits the most dangerous region in the world?

Having recently spent 10 days visiting Taiwan with the Australian Institute of International Affairs, my answer is a resounding no. Taiwan and the Taiwanese people have a calm, relaxed and polite air. They seem immune to the bellicose, megaphone diplomacy of mainland China.

And as they continue to strengthen their economy and deepen their international friendships, their destiny would seem increasingly secure, although they need to invest much more in their military capabilities. But there will never be grounds for complacency — as the case of Hong Kong demonstrates, things can change virtually overnight.