A Geopolitical Primer on Taiwan

IN THIS PUBLICATION:

• China’s goal with Taiwan is reunification, though it would prefer to do so peacefully.
• Pelosi’s visit, which in and of itself doesn’t matter much, is another sign of the deterioration in the bilateral relationship between the U.S. and China.
• There are a few different scenarios for how the Taiwan situation resolves, and while there is a possibility to avoid war, the chances of that are getting slighter by the day.

What’s Happening in Taiwan?

U.S. Speaker of the House Nancy Pelosi visited Taiwan. She’s the first Speaker to do so since Newt Gingrich visited in 1997.

At the risk of stating the obvious:

• The world is a much different place in 2022 than it was in 1997 when globalization was on the rise, China was on the cusp of joining the World Trade Organization, and songs like Semi-Charmed Life by Third Eye Blind topped global charts (Diego’s note: Jacob’s music references do not represent, in any sort of way, the music taste of other contributors. Tim’s note: that song’s an icon of a generation… just not Diego’s generation.).
• This was a period when the West, and especially the U.S., assumed that as globalization worked its magic that Cold War holdouts like China would eventually give up their modes of government for U.S.-style capitalism (this included the assumption that the Chinese Communist Party would give up its designs for Taiwan and, maybe start listening to Third Eye Blind too).

As it turns out, that was a naïve sentiment. The world is going multipolar – and China is on the rise, aiming to use its newfound wealth and strength to achieve what Chinese President Xi Jinping refers to as his dream of “the great renewal of the Chinese nation”. Reacquiring Taiwan is one of the most important aspects of Xi’s dream, and from Beijing’s perspective, one of the most powerful political figures in the U.S. (dear Nancy) just spit in that dream’s face.

The result? Not World War III, despite the breathless coverage from the media, which will fade away in a few weeks’ time as it has around the still-ongoing war between Russia and Ukraine. China is not powerful enough to conquer Taiwan yet, but make no mistake – China is building up its military capabilities in part so that a threat of force against the renegade island will mean more in the future.

For years, China has strengthened economic ties with Taiwan, from poaching Taiwan’s best tech talent with the promise of higher salaries to absorbing large parts of Taiwan’s manufacturing base to the point where today, over 80%of Taiwan’s information and communication technology products are manufactured in China.

Politically, China has tried to increase its influence as well, though in this area most of China’s efforts have backfired: an increasing number of people in Taiwan feel Taiwanese, not Chinese (63.7% to be accurate, according to recent polling data), and the more nationalist Democratic Progress Party (DPP) has a strong foothold amongst voters, having been in power since 2016.