The growing tensions between China and Taiwan could have serious implications for India and Japan besides the rest of the world.
The China-Taiwan conflict and the Biden administration’s renewed concerns over the stability of the cross-strait (which separates the Chinese mainland from the Taiwan island) seem to be destabilizing not only the security architecture in the Indo–Pacific but also the global semiconductor industry that is core to every field, from defense to agriculture.
Taiwanese Coast Guards on May 8 seized a Chinese offshore supply vessel and its 12 crew members trespassing into Taiwanese waters off the coast of Penghu.
On April 30, Taipei had protested over five Chinese military aircraft entering Taiwan’s air defense identification zone (ADIZ). They included two multi-role strike fighters.
According to Taiwan’s Ministry of National Defense (MND), China’s military aircraft entered Taiwan’s ADIZ 22 out of 30 days in April.
It is widely believed that tensions across the Taiwan Strait have grown recently due to the increasingly aggressive behavior of China in reaction to closer ties between the United States and Taiwan
Since 1978, the US has been pursuing what is called “One China policy”, which implies restricted interactions between the officials of the USA and Taiwan that is claimed by China to be its territory. The only condition has been that China will not undertake any forcible “reunification” with Taiwan.
China’s Aggressive Posture
But things have been changing a bit over the past few years, given the rising ambitions of China, of late, to impose its hegemony on the Indo-Pacific.
Realizing the geopolitical significance of Taiwan remaining free from Chinese control, many Democrats and the Republicans in the US now are backing Taipei and standing up to Beijing.
This explains why Taiwan’s chief representative to the United States, Hsiao Bi-khim, was invited to attend the inauguration ceremony of President Biden in January. She became the first person in that position to receive an official invitation for such an occasion since the countries severed ties in 1979.
Taipei to dispatch military aircraft, ships to counter Chinese activities in Taiwan Strait https://t.co/EGlrzKmuEs
— Taiwan Defense (@taiwandefense) May 5, 2021
Similarly, what was considered hitherto unthinkable, following their first summit on April 16, US President Joe Biden and Japanese Prime Minister Yoshihide Suga mentioned in their joint statement the importance of peace and stability in the Taiwan Strait. The joint statement drew a severe rebuke from Beijing.
Likewise, an unprecedented public meeting between officials from the US and Taiwan in Paris on May 1 infuriated China. “There is only one China,” China’s Embassy in France said in a statement, adding, “Taiwan is an inalienable part of Chinese territory, and the government of the People’s Republic of China is the only legal government representing all of China. This is a fact recognized by the entire international community and a fundamental norm in international relations.”
From the Republicans’ side, Mike Pompeo, a former secretary of state, and Nikki Haley, a former United Nations ambassador, have met with Hsiao Bi-khim in recent months. Both the Republican leaders later posted about their meetings on social media, extolling Taiwan’s commitment to democracy and freedom.
Airspace Violations By China
It may be noted that following a brief incident in 1999, the Chinese aircraft had not intruded into Taiwan’s ADIZ until March 2019. Since then, such intrusions have become quite frequent. By October 7, 2020, Taiwan reported that the PLA Air Force had violated airspace 49 times, at a bigger scale and with greater complexity.
Geopolitical analysts ascribe the Chinese aggression to President Xi Jinping’s unwillingness to leave the Taiwan issue to be resolved by future generations; he wants to complete the “national rejuvenation” by bringing back Taiwan much earlier than the centenary of Communist China’s founding in 2049.
Though it seems unlikely at the moment that Xi will contemplate an actual across-the-beach invasion of Taiwan, analysts say that he has decided to engage in a persistent and pervasive form of “gray zone” warfare that seeks to intimidate and wear down a foe without provoking a conventional military response.
To this end, Beijing has pursued what is said a long-term intimidation campaign against Taiwan’s population, with aggressive military postures since 1996, when China lobbed missiles near the waters in Taiwan.
Chilling warning from #China's State Media to BOMB #Australia with long-range missiles should Canberra support #US military action in #Taiwan
#Beijing has been ramping up efforts for Taiwan 'reunification' under 'One China' https://t.co/4Yejxa5lSE
— Indo-Pacific News – Watching the CCP-China Threat (@IndoPac_Info) May 9, 2021
Implications for India & Japan
There are two serious implications of Taiwan coming under Chinese control for the rest of the world, including India.
One, Taiwan, which has always played a vital role in strategic thinking on the defense of Japan and of the US position in the Western Pacific, is considered by China to be the core of its “first island chain”.
Once it falls, the security of Japan and other American allies in Asia gets seriously endangered. It will give China a great geopolitical advantage by securing uninterrupted access to the Indo-Pacific and reduce Tokyo’s security on its southern flank.
In that sense, Taiwan’s defense becomes a testing case for the US allies and friends that Washington does have the ability to protect their interests.
Two, Chinese control over Taiwan will have several adverse consequences for the crucial production of computer chips i.e., integrated circuits, or semiconductors. Taiwan’s critical role in the global semiconductor supply chain makes it extremely important to the global industry, and an even juicier prize for Beijing.
Semiconductors are the heart of all electronic devices, and power telecommunications systems; industrial controllers and manufacturing equipment; automobile systems, aircraft avionics, and advanced weaponry systems.
Although the US accounts for nearly half of global semiconductor sales, its share of global semiconductor manufacturing has dropped reportedly from 37 percent in 1990 to 12 percent in February 2021.
This is because it is cheaper for US companies — which still lead in semiconductor IP and research and development — to contract out fabrication than it is to build onshore plants, which typically cost billions of dollars.
As a result, a CNBC report, says that Taiwan companies with chip-making fabs, also known as foundries, command 63 percent of the worldwide market revenue in the chip business (CNBC, March 15). In this, Taiwan Semiconductor Manufacturing Corporation (TSMC) is a big player.
According to TSMC chairman Mark Liu, Taiwan is “the Silicon Shield”. “That means the world needs Taiwan’s high-tech industry support. So they will not let the war happen in this region because it goes against the interest of every country in the world,” he says.
According to noted American columnist Thomas L. Friedman, though China is an emerging superpower, it still lacks the capacity to develop its own vertically integrated microchip industry as it has so far largely failed to master the physics and hardware to manipulate matter at the nano-scale, a skill required to mass-produce super-sophisticated microprocessors.
“That is why”, Friedman argues, “today — as much as China wants Taiwan for reasons of ideology, it wants TSMC in the pocket of Chinese military industries for reasons of strategy. And as much as US strategists are committed to preserving Taiwan’s democracy, they are even more committed to ensuring that TSMC doesn’t fall into China’s hands for reasons of strategy”.
India, too, has vested interests in Taiwan’s safety as it is very weak in semiconductor manufacturing and heavily dependent on the island nation. Though 65% of India’s massive electronic imports are from China, the fact remains that most of the electronic products imported from China are made with Taiwanese chips.
Keeping this in mind, the Government of India was possibly wooing Taiwan last December by calling for expressions of interest (EoI) for setting up or expanding existing semiconductor wafer and device fabrication (fab) facilities in the country, or even acquisition of semiconductor fabs outside India.