GS-2: Effect of policies and politics of developed and developing countries on India’s interests.
A ‘Taiwan flashpoint’ in the Indo-Pacific
Context: In a new incident last week, a U.S. nuclear-powered submarine reportedly ran into an “unidentified object” while in the South China Sea. China has objected to these U.S. actions vociferously.
Therising confrontation between the United States and China erupts into a clash of arms, the likely arena may well be the Taiwan Strait.
Brief Background of Taiwan:
Taiwan is the unfinished business of China’s liberation under the Chinese Communist Party (CCP) in 1949.
The Guomindang (KMT) forces under Chiang Kai-shek lost the 1945-49 civil war to the CCP forces under Mao Zedong.
Chiang retreated to the island of Taiwan and set up a regime that claimed authority over the whole of China and pledged to recover the mainland eventually.
The CCP in turn pledged to reclaim what it regarded as a “renegade” province and achieve the final reunification of China.
Taiwan could not be occupied militarily by the newly established People’s Republic of China (PRC) as it became a military ally of the United States during the Korean War of 1950-53.
It was described as an “unsinkable aircraft carrier” underscoring its strategic significance.
This phase came to an end with the U.S. recognising the PRC as the legitimate government of China in 1979, ending its official relationship with Taiwan and abrogating its mutual defence treaty with the island.
Strategic ambiguity of US & China vis-à-vis Taiwan
U.S. has declared that it will “maintain the ability to come to Taiwan’s defence” while not committing itself to do so. This is the policy of “strategic ambiguity” of USA
China, on the other hand, is committed to pursuing peaceful unification but retains the right to use force to achieve the objective. This is its China’s version of strategic ambiguity.
What has been the policy of China towards Taiwan?
China has pursued a typical carrot and stick policy to achieve the reunification of Taiwan with the mainland.
It has held out the prospect, indeed preference for peaceful reunification, through promising a high degree of autonomy to the island under the “one country two systems” formula first applied to Hong Kong after its reversion to Chinese sovereignty in 1997.
According to this formula, Hong Kong would retain its free market system and its political and judicial institutions and processes for a period of 50 years, thus enabling an extended and gradual transition.
The same was promised to Taiwan, but with the added assurance that it could also retain its armed forces during the transition period.
Economic Links between China and Taiwan
With China itself adopting market-oriented reforms since 1978 and becoming a significant economic and commercial opportunity globally, Taiwan business entities have invested heavily in mainland China and the two economies have become increasingly integrated.
Between 1991 and 2020, the stock of Taiwanese capital invested in China reached U.S. $188.5 billion and bilateral trade in 2019 was U.S. $150 billion, about 15% of Taiwan’s GDP.
By contrast the stock of Chinese capital invested in Taiwan is barely U.S. $2.4 billion
China hopes that burgeoning economic relationship with Taiwan would weaken opposition to unification.
At the same time, China is capable of inflicting severe economic pain on Taiwan through coercive economic policies if Taiwan is seen to move towards an independent status.
Hong Kong & impact on Taiwan
Recently, China adopted a series of hardline policies in Hong Kong, abandoning the ‘One Country Two Systems’ formula.
As a result, Public opinion in Taiwan swung in favour of The Democratic Progressive Party (DPP), who is more representative of the indigenous population of the island, and favours independence.
One important implication of this development is that prospects for peaceful unification have diminished.
Is China prepared to carry out military operations to invade and occupy Taiwan?
In March 2021, the U.S. Pacific Commander, warned that China could invade Taiwan within the next six years as part of its strategy of displacing U.S. power in Asia. He suggested that Chinese military capabilities had been developed in order to achieve this objective.
The recent initiatives of the Quad and AUKUS may act as a deterrent against Chinese moves on Taiwan.
But they may equally propel China to advance the unification agenda before the balance changes against it in the Indo-Pacific.
For these reasons, Taiwan is emerging as a potential trigger point for a clash of arms between the U.S. and China.
Conclusion
In pursuing its Indo-Pacific strategy, India would do well to keep these possible scenarios in mind.
