What is it about Taiwan anyway?
Why does China care so much about this little island — and why should we in the U.S. give a flying hoot?
Further, why is Taiwan such a big deal right now? (And a focal point of the virtual summit held this week between Joe Biden and Xi Jinping.) The disputed status of Taiwan has been an issue for almost three quarters of a century. Now for some reason Taiwan has moved from a tolerable friction point between the U.S. and China to a potential flashpoint. And that’s not good.
Before we get to those questions, let me first acknowledge the almost endless sensitivity and nuance surrounding Taiwan. You will see that the situation with Taiwan is massively complex, (second only perhaps to the Israeli/Palestinian conflict) where understanding requires an extensive peeling-of-the-onion exercise. Two quick points: First, it’s extremely interesting, and second, don’t worry, I’ll boil it down for you.
Let’s start with a quick backgrounder.
First, I was a bit hyperbolic earlier. Taiwan isn’t really small, more like medium-sized. It has a population of 23.4 million, (56th biggest in the world), a GDP of $760 billion (21st biggest) and GDP per capita of $32,000, (29th). (Some have compared Taiwan and its situation to Puerto Rico, which is off for all kinds of reasons, starting with all those much bigger numbers.)
More than that though, Taiwan’s economy has grown sharply over the past half century, becoming a critical supplier of semiconductors, (20% global market share), especially made by Taiwan Semiconductor, (TSM), (which has a market cap of $631 billion). Even more important of course is that it has become a close ally of the United States. Or as the Washington Post puts it, “[Taiwan] is also among Asia’s most vibrant democracies, a rejoinder to Communist Party arguments that Western political structures are incompatible with Chinese culture.”
The main island of Taiwan, sometimes called Formosa, holds the great bulk of the population as well as the largest city/capital Taipei, but Taiwan writ large actually consists of 166 islands, some like Kinmen (164 square miles) fairly big, others tiny and uninhabited, spread out over thousands of miles some near mainland China. All those islands highlight just one facet of the complexity. For example, what would happen if mainland China seized some tiny rock somewhere? How would Taiwan and/or the U.S. respond?
To wit: Check out this massive multi-scenario war game piece by Reuters.
It is almost beyond-the-pale complicated, including what’s called gray-zone warfare being deployed by the Chinese (defined by Reuters as “…an almost daily campaign of intimidating military exercises, patrols and surveillance that falls just short of armed conflict.”)
Now let’s move on to what is often referred to as Taiwan’s status quo, or where Taiwan stands politically vis-à-vis mainland China and the rest of the world. To go deep here, check out this massive “Political status of Taiwan” Wiki page. But in a nutshell, the status quo refers to the fact that Taiwan is in political limbo and has been since 1949 when the Communists led by Mao defeated the Nationalists led by Chiang Kai-shek, who fled to Taiwan. (There’s salient history here with the Japanese and its occupation of Taiwan during World War II, but I’m going to skip over that for the sake of brevity.)
The Republic of China (the Nationalists or ROC) then declared itself the legitimate government of all of China and included a statement of intent to take back mainland China, (it has backed off that claim in recent years.) The People’s Republic of China (the Communists or PRC) declared itself the legitimate government of all China including Taiwan and noted that it intended to establish sovereignty over Taiwan.
Since then several realities have unfolded. First, the PRC has been almost universally recognized as the government of mainland China, highlighted by UN resolution 2758 approved in October 1971 which recognized the PRC as “as the only legitimate representatives of China to the United Nations.” (Check out this map of countries that voted for and against admitting the PRC — note that the U.S., Japan and Australia voted against.)
The U.S. cut diplomatic relations with Taipei in 1979, but, according to this State Department Bilateral Relations Fact Sheet, “enjoys a robust unofficial relationship.” In fact only 15 countries maintain diplomatic relations with Taiwan, (down from 22 five years ago), including Paraguay, the Marshall Islands and Honduras — or as one Chinese person said to me, “only countries Beijing doesn’t care about that rely on the U.S.” (Ouch.)
Second, as noted previously, Taiwan has evolved into an independent, self-governing entity with a Democratically elected government and a thriving economy.
A third trend (leaving aside politics and militarism) is that Taiwan and mainland China have paradoxically grown much closer in terms of business, trade, education and culture over the decades. For instance in 2020, Taiwan’s exports to China hit an all-time…
Read More: Why you should care about Taiwan