hen China’s President Xi Jinping called U.S. President-elect Donald Trump to congratulate the Republican on his resounding victory, he delivered a warning too: The two powers “gain from cooperation and lose from confrontation”.
Trump and Xi have already had a taste of economic confrontation in the form of a trade war, kicked off under the former’s first term as U.S. president when he introduced swathes of tariffs against Chinese imports—a move swiftly reciprocated by Beijing.
More tariffs are coming in the second term. But there is a far-greater U.S.-China confrontation lurking ominously in the background, one with potentially catastrophic consequences not just for the Indo-Pacific, but for the whole world: A war over Taiwan.
Under its “One China principle,” Beijing considers Taiwan a part of China and not an independent state. Its goal is “reunification” and to right what it sees as a wrong stemming from the Chinese Civil War that ended in 1949 with communists in control of Beijing.
Since the 1970s, the U.S. has adopted a “One China policy,” whereby Washington maintains official relations with Beijing and does not recognize Taiwanese independence, but has strong unofficial ties and commits to helping Taiwan with its defense capabilities
Washington also maintains “strategic ambiguity” over whether it would intervene militarily against a Chinese invasion to coerce Taiwan into reunification—also sometimes referred to as “integration”—though previous administrations have strongly hinted that they would.
The island of Taiwan, a prosperous democracy of nearly 14,000 square miles in size and with a population of 23.5 million, most of whom are ethnically Han Chinese, is of strategic significance in the Indo-Pacific for a number of reasons.
It sits between the East China Sea and South China Sea, with the Taiwan Strait connecting the two, and is in the middle of the “first island chain” of archipelagos. This gives it both trading and naval importance with security implications for China as well as America’s key regional allies, such as Japan and South Korea.
Taiwan is also the world’s major hub for semiconductor manufacturing—accounting for more than half of the global market—which is crucial for the microchips used in technology spanning consumer gadgets to cutting-edge military hardware, making it of huge utility to the West and a high-value prize for China.
Both China’s PLA and the Taiwanese army regularly hold dramatic military drills simulating the attack and defense of the island, signaling their readiness for battle and—each side hopes—the futility of a war for their opponents.
