By Eric Vandenbroeck and co-workers

If China Forces a Confrontation with Taiwan

Aware of the importance of a potential war with Taiwan in February 2005 we mentioned that early on in the period of the late Qing Dynasty the  Republic of China was in the formation stage of modern Chinese nationalism with its initial usage of the concept of “Chinese nation” which developed around the period of the May 4th Movement.

While Mao Zedong in March 1953 still referred to "Han chauvinism" to criticize his rival Kuomintang party, this drastically changed following the 1989 Tiananmen crackdown initially called the Forbidden History.

During the 1980s, largely due to the relatively liberal political environment and the policies of reform-minded top leadership, Chinese nationalism had a moderate orientation, this changed following the 1989 Tiananmen crackdown when history and memory were developed to become a new power.

The centerpiece of this post-1989 state-sponsored revival of Chinese nationalism was the so-called patriotic education campaign, a comprehensive program that revamped history textbooks, reconstructed national narratives, and renovated historical sites and symbols throughout China. The sole purpose of this program was to rekindle the Chinese population’s sense of national humiliation and, consequently, their antipathy toward the West. The “patriotic education campaign” achieved remarkable success in reawakening the most parochial and xenophobic strains of Chinese nationalism.

A hundred years following the 1840 Opium War, China was on the verge of subjugation and loss of its thousands-year-long national identity. The Eight-Power Allied Forces occupied Beijing in 1900. Japan annexed Taiwan and Manchuria and occupied more than 900 cities from China. Hong Kong, Macao, and numerous small areas became concession zones to foreign powers. The invasion by Western powers and Japan reduced China to the status of semi-colonial society. The Chinese nation was facing a grave threat to national survival.

"The peoples of China are in the most critical time, everybody must roar his defiance." As represented by China's national anthem, a very strong sense of crisis, or sense of insecurity, has always been an important theme of the national political discourse in China. But as seen from even Albright’s above-mentioned book, the narrative of national salvation depends upon national humiliation; the narrative of national security depends upon national insecurity.

After the end of the Cultural Revolution (1966-1976), the most serious challenge for the Chinese Communist Party (CCP) in the 1980s was a crisis of faith in socialism, crisis of belief in Marxism, and crisis of trust in the party. When the official Communist ideology lost credibility, the Communist regime became incapable of enlisting mass support behind a socialist vision of the future. There was a spiritual vacuum resulting from decades of communist repression of both traditional and Western belief systems. Under these circumstances, some intellectuals, particularly the younger generation of intellectuals, turned to Western liberal ideas and called for Western style democratic reform. The belief and faith crises finally evolved into a pro-democracy movement and eventually led to the large-scale Tiananmen demonstration in the spring of 1989. These crises became even more evident following the international collapse of the communist ideology itself. China's communist rulers feared that, in the mind of ordinary Chinese, they had already lost the "mandate of heaven" to rule China.

Whereby now, China’s military exercises in the waters around Taiwan this month, the largest in almost three decades, highlight the growing risk of a total breakdown in United States-China relations. A full-scale invasion of Taiwan is one eventuality; last year, the C.I.A. director, William Burns, noted that China’s president, Xi Jinping, has instructed his armed forces to be ready for an invasion by 2027.

That isn’t Xi’s only option. He could use his far larger coast guard and military to impose a “quarantine,” allowing merchant shippers and commercial airlines to travel in and out of Taiwan only on China’s terms. This strategy would mirror Beijing’s moves in the South China Sea, where its coast guard is trying to assert control over waters and atolls that are part of the Philippines, a U.S. treaty ally.

If China forces a confrontation over Taiwan, which Beijing claims as its own territory, the United States will need to respond decisively: The implications are enormous, potentially including a global economic crisis far worse than the shock caused by the Covid-19 pandemic.

 

Right now, America isn’t ready.

As a report from a House panel concluded last year: “The United States lacks a contingency plan for the economic and financial impacts of conflict” with China.

Addressing this lack of preparation must be a bipartisan priority. The incoming administration must work with Congress and allied governments to develop a coherent plan that clearly outlines a vision for the global economy during and after a crisis that is anchored in American economic leadership.

The most obvious economic implications relate to semiconductors. Taiwan Semiconductor Manufacturing Company produces about 90 percent of the world’s most advanced computer chips. Some are now made in Arizona, but T.S.M.C.’s most cutting-edge chips are still produced in Taiwan. Industries from autos to medical devices depend on these chips; if Taiwanese chip production is disabled, the global economy could be plunged into a deep slump. If T.S.M.C.’s factories fall into China’s hands — it relies on T.S.M.C.’s chips, too ,  Beijing could seize a competitive edge, including in the development of artificial intelligence technology, and have American and European manufacturers over a barrel.

Taiwanese President Lai Ching-te vowed to keep increasing the island’s defense spending and display its resolve to fight, as Beijing intensifies drills showcasing its ability to use military force against Taipei.

“Taiwan needs to be prepared for danger in times of peace and must continue increasing its defense budget and strengthen military capabilities, demonstrating our determination to protect the country,” Lai said during his New Year’s address in Taipei on Wednesday. 

Since Lai’s inauguration in May, Beijing has ramped up pressure on Taiwan with two large-scale military exercises encircling the island. Following his first overseas trip as president in December, which included stopovers in the US territories of Hawaii and Guam, China launched what Taipei called the largest naval deployment in years along the first island chain.

Lai’s vows come as President-elect Donald Trump returns to the White House this month posing fresh uncertainty for Taiwan, a self-ruled democracy that produces the majority of the world’s advanced chips. The Republican has suggested the island “should pay” America for its defense and cast doubt over whether the US would defend Taiwan from any Chinese invasion, as Joe Biden repeatedly pledged.

While Taiwan has already committed to record military spending in 2025, those plans risk being upended by political turmoil roiling Lai’s first year in office. Opposition camps in the legislature — where his ruling party doesn’t hold a majority — are trying to push through a budget revamp that officials say could slash defense outlay by 28%. 

Chinese President Xi Jinping delivered his own annual New Year address Tuesday and reiterated the Communist Party’s position on Taiwan. “No one can ever stop China’s reunification,” he said, alluding to Beijing’s longtime vow to bring the island under its control, by force if necessary.

 

Drone Development

Lai mapped out his vision for uniting with fellow democratic nations on the development of drones that are now a cornerstone of modern warfare. Taiwan’s Defense Ministry has signed agreements with the US allowing it to buy as many as 1,000 attack drones from AeroVironment Inc. and Anduril Industries Inc. to blunt a potential Chinese invasion.

China’s military has sent drones circling Taiwan in recent years, signaling a new surveillance tactic as cross-strait tensions remain high.

The Taiwanese leader, who Beijing previously branded an “instigator of war,” also joined the chorus of world leaders complaining about China’s glut of cheap exports. A global alliance of trading powers including the US and the European Union have imposed tariffs on a range of Chinese goods over the past year to shield domestic companies.

“Low-price dumping in the red supply chain will have a huge impact on the global market in the future,” Lai said. “We need to jointly build a more resilient democratic supply chain.”

Taiwan isn’t immune from the tariff fever sweeping the world. The island’s significant trade surplus with the US could make it a target for Trump’s proposed tariffs, and the island’s central bank has stated its growth momentum may be affected by supply chain restructuring.

 

 

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