China move that could ‘paralyse’ globe as Xi Jinping urges return of Taiwan
It’s an idea at odds with history and reality - and turning it into fact could trigger a generational crisis. Yet it’s never far from the lips of Chinese President Xi Jinping.
It’s an idea at odds with history and reality - and turning it into fact could trigger a generational crisis.
Yet it’s never far from the lips of Chinese President Xi Jinping.
When President Xi spoke on the phone with Donald Trump this week, he again pressed the case for Taiwan to be returned to China.
The pair were speaking after the new Japanese prime minister, the firebrand Sanae Takaichi, warned that a Chinese attack on Taiwan could result in a military response from Tokyo.
China fumed that Japan had “crossed a red line”, and tensions escalated further when the Japanese military scrambled jets in response to a suspected Chinese drone - all while the Taiwanese president announced A$60 billion in extra defence spending.
President Xi’s message for President Trump was a grim reminder that a Chinese attack on Taiwan would prove catastrophic for Australia and the global economy, not to mention the Taiwanese people, who have long valued their independence.
“If China succeeded in controlling the island of Taiwan it would be a game-changer for the strategic environment in the Pacific and this would massively affect Australia’s security, upending 70 years of peace and stability,” China expert Anne-Marie Brady told news.com.au.
“So a resilient Taiwan is good for the whole of the Pacific, including Australia and New Zealand.”
Strategic Analysis Australia director Michael Shoebridge said a conflict over Taiwan would “paralyse international trade”.
Nearly half of the world’s container ships pass through the Taiwan Strait.
“You cannot have business as usual through the world’s busiest international waterways while a war between China and the US and partners is underway,” Mr Shoebridge said.
“And Australia’s economy is deeply dependent not just on exporting stuff to China, but importing a whole lot of household items. Bunnings and Woolworths, for example, are hugely exposed to getting products to sell to Australians out of China.
“So we’d feel the effects quickly because these companies don’t have stockpiles. We are asleep at the wheel when it comes to the practical consequences of Australia’s import dependence on China.”
The analyst added that if America came to Taiwan’s aid, there would be “immediate US expectations that Australian facilities were available to the US”.
Why is Taiwan important?
Increasingly, the world economy hinges on Taiwan and its chip production — which is worth roughly US$1.57 trillion ($2.4 trillion).
Most high-performance GPUs – including almost all NVIDIA chips powering the AI boom – are manufactured by Taiwan Semiconductor Manufacturing Company (TSMC).
South Korea and the US make some AI chips, but Taiwan produces the vast majority because it has been pouring capital into chip fabrication since the 1980s.
In an invasion, TSMC – which depends on sensitive equipment and thousands of highly trained staff – would likely be put out of action.
Big Tech would scramble to diversify outside Taiwan, but replicating TSMC’s capacity would take years and tens of billions of dollars.
The AI build-out that has been driving US and global growth would stall, causing a panic on the scale of the 2008 Global Financial Crisis.
And the economic blowback for China would be severe, as countries began a painful decoupling and moved their supply chains elsewhere.
China’s ‘century of humiliation’
If invading Taiwan would be ruinous for China, why does Xi Jinping still keep it on the table?
For many mainland Chinese, “reunification” is a matter of national pride and historical justice.
After the CCP took over China, the Republic of China (ROC) government retreated to Taiwan in 1949, where it has governed ever since.
Ms Brady said the CCP were “unable to take over Taiwan as they lacked an air force or navy at the time”.
Reclaiming Taiwan remains a popular goal on the mainland, where students are taught that the island was lost during a “century of humiliation” by foreign powers, including Japan’s takeover of the island in 1895.
In those days, China was still ruled by the Qing dynasty, and the CCP had yet to be founded.
“Taiwan has never been part of the People’s Republic of China,” Ms Brady said.
The University of Canterbury professor added that the odds of a seaborne invasion of Taiwan were “slim,” arguing that Xi favoured different methods.
“The CCP government prefer a ‘smokeless war’ to take Taiwan, whether through political subversion, intimidation, or a combination of both.
“They are using greyzone tactics which fall short of full-scale invasion to surround and weaken Taiwan.”
Mr Shoebridge agreed that China hoped to gain control of Taiwan through “continued pressure and coercion” rather than all-out war.
“Plan ‘A’ out of Beijing is to win without fighting. However, they’re doing everything to give Xi Jinping the military option of invading Taiwan to conquer it by force,” he said.
“That’s how they’re building the Chinese military and exercising it around Taiwan. So I don’t think we can rule out Xi Jinping deciding the moment is right to use force in the next five years, even though that’s not plan ‘A.’”
Trump said on November 2 that Xi “understands the answer to that” when asked if the US would come to the defence of Taiwan during a Chinese attack.
He described Tuesday’s call with Xi as “very good” and said he’d agreed to visit Beijing in April, as well as invited the Chinese president for a state visit next year.
“Our relationship with China is extremely strong!” the US president posted on social media.
“There has been significant progress on both sides in keeping our agreements current and accurate. Now we can set our sights on the big picture.”
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Originally published as China move that could ‘paralyse’ globe as Xi Jinping urges return of Taiwan
