The centre of the cold war between China and the US
On Sunday 20 December the aircraft carrier Shandong sailed through the streets of Taiwan. The day before, a ship of the American Navy passed by. The Shandong is China’s second aircraft carrier. It is even the first aircraft carrier built entirely in China. The other aircraft carrier, the Liaoning, is an old Russian aircraft carrier. The third aircraft carrier is in the pipeline. More will follow. Taiwan reacted immediately with several aircraft and naval vessels. In recent years, tensions have increased around Taiwan. Xi Jinping is much more nationalistic than the big helmsmen in front of him. In 2016, the Kuomintang in Taiwan also lost the elections. This party has more sympathy for China than the Democratic Progressive Party that is now in power in Taiwan. Beijing is quite successful in isolating Taiwan. In recent years, several countries have given up their diplomatic ties with Taiwan and have opted for the commercially interesting China. The World Health Organization and the International Civil Aviation Organization also exclude Taiwan from meetings to which they were invited in the past. China also requires foreign airlines to indicate Taiwan on the map as part of China.
Xi Jinping wants to end the current status quo between China and Taiwan. He seeks reunification with this renegade province. He wants to go down in history as the leader who made Taiwan fully part of China again. In response, the United States has become more assertive when it comes to Taiwan. It has even threatened to station American troops there. Taiwan’s street is the new geopolitical centre of the world stage, taking over the role of the Persian Gulf. Yet it is unlikely that China will take over power in Taiwan through military struggle. The US army is still too powerful for that. Moreover, such an action will not make China popular in the world. Not that China really cares. In Hong Kong, the Chinese security law is now in force, a law in which Taiwan is also explicitly mentioned. China is more likely to use its economic power to intimidate and isolate Taiwan. At the same time, Beijing is trying to tempt Taiwanese companies to relocate more activities to mainland China.
Next year marks the 100th anniversary of the Chinese Communist Party. In China, birthdays are important, and certainly those with round numbers. The main starting point of the Chinese Communist Party is national integrity, a direct consequence of the fact that in 1921, China was threatened by imperialism and colonisation by Japan. What better way to celebrate the unification of China on that anniversary. Taiwan is also home to the world’s largest chip factory. The market capitalisation of TSMC is now greater than Intel, the company that once symbolised the power of Silicon Valley. Certainly, now that the United States is attacking China in the field of technology, such a trophy is a good thing. Every year, China spends more on semiconductor imports than on oil imports, so Taiwan is more important to Americans than Saudi Arabia. China’s need to act in the Taiwan conflict is increasing now that the United States is excluding companies such as Huawei, ZTE, and SMIC from American technology.
The big question is, of course, how China intends to annex Taiwan. China is investing heavily in its own semiconductor technology and has sufficient power over Taiwan to force it to cooperate. A strong Chinese technology sector also means a stronger Chinese army. Countries that invest heavily in the military, such as the United States, Japan, South Korea, and Israel, all have strong technology sectors. So the knife cuts both ways. China’s open display of arms in the streets of Taiwan will make companies more reluctant to invest in Taiwan. They will also no longer want to be dependent on Taiwanese components. An even greater step forward, in anticipation of the celebration of the party’s centenary, is quite possible. Xi has also shown in Hong Kong that he will get his way in the end.