Beijing: Preparing for the Siege of Taiwan, Itself, or Both?

Contextual Information

• Post World War 2, Japan was forced to cede power of Taiwan to China by the allied powers. However, China underwent an ideological civil war between communism and nationalism, in which the communists took control of mainland Chinas with the nationalists fleeing to Taiwan. Both countries see themselves as China, however, to the international community only mainland China is truly recognised, not Taiwan. Despite this, Taiwan is a non-recognised region of geopolitical importance within the Pacific region to both China and the US, and more widely the world.

• Taiwan geographically sits at the centre of 3 key straits. These are the Miyako Strait to the North of Taiwan between itself and Japan, the Taiwan Strait to its East between China, and the Bashi strait to its South with the Philippines.

• Despite being of immense importance to the US grand strategy in the Far East, America does not endorse Taiwan as an independent state due to the strategic leverage it provided over the Soviet threat. Despite both being communist, China and the Soviets were rivals due to their divergent understanding of communisms inception. Where Stalinist communism had power heavily concentrated within the state, Mao’s Communism was people led and focussed on peasant class rule. Because both states desired to be the leader of communisms’ future, China provided a counterbalance to Soviet power. This ideological divide among other tensions between the states, was capitalised on by the US.

• In 1971, Taiwan was kicked out of the United Nations upon China’s entry. This was followed by the US’s first presidential visit to China in 1972 by President Nixon leading  to the creation of the Shanghai communiqué in which America recognised one unified China that Taiwan was a part of. In 1979 America signed the Taiwan relations act (TRA) which ended formal ties between the nations. The United States then closed their embassy but still assured Taiwan defence through weapons deals.

• Now, Taiwan has a population of 23 million people and is the regions strongest democracy, championing an independent press and regularly held free elections. China has been increasingly aggressive toward Taiwan, executing military drills in the waters surrounding it, worrying those around the world of what precedent this may set for other aggressive nations with similar expansionist motivations.

American Stakes and Strategy

• American stakes within this region are especially high due to Taiwan’s economic salience in the production of semiconductors. Taiwan is home to the most advanced microchips currently available which many powers, including the US, France, Germany and the UK are reliant upon. These chips are used in devices ranging from household appliances such as fridges, to electronic items such as laptops, and most importantly military technology.  Because China already has much of the world subdued to its manufactured goods, for China to gain control of Taiwan, who occupy 60% of the global share for semi-conductors, would shift the locus of economic power away from the US towards China.  The US also faces an ideological struggle affecting its soft power following the failure to intervene and protect Ukraine from Russian aggression in Europe. What is already a diminished image as protector of the free world, non-intervention in Taiwan would further reduce, if not completely shatter this narrative.  Thus, within the international community, a potential lack of need for the US economically and lack of trust of the US politically harms its position as the global hegemon which could lead to defects in behaviour from nations traditionally seen as unconditional allies.

• The American strategy to ensure Taiwan’s safety from Chinese occupation is called the island chain defence. There are two chains, the first includes military bases starting from Japan, going through the Philippines, then Borneo and ending in Vietnam. Creating a second semi-circle, if the first chain fails, is from Japan’s Bonin Islands, Guam, the Northern Mariana Islands, Palau, the Federated States of Micronesia, and the Marshall Islands. This contains China by projecting US military power using its allies in the region and prevents China from full power projection in the Pacific Ocean surrounding Taiwan.

Chinese Stakes and Strategy

• Chinese occupation of Taiwan not only provides a monopoly over the semi-conductor industry but would also break the central link to the island chain defence providing them unfettered access to the 3 straits mentioned previously. This help China secure their supply line of oil coming through the Malacca Strait which is what connects Beijing to its oil and non-oil imports. This Strait located between Singapore and Indonesia, accounts for 60% of Chinese oil imports thus is responsible for Chinese energy security. If China, the world’s largest energy consumer, was to trigger a conflict over Taiwan then this strangle point could be activated, preventing prolonged conflict whilst causing significant economic losses.

• China Militarily, although not a match for the US equivalents, has still made huge progress in closing the technology gap. For the invasion of Taiwan, an island, the most important military apparatus is naval as they will have to conduct the largest amphibious assault since D-Day across 130 km of open water. This means transporting hundreds of thousands of troops, tanks, and equipment whilst under fire from US military bases and its allies in the region. The attempt to increase its naval capacity was seen with the Fujian aircraft carrier which has the capabilities similar, but not superior to the US equivalent, the USS Gerald R. Ford.

• Economically they are bypassing common chokeholds, including trade embargoes and economic sanctions. It has begun diversifying its shipping routes by investing into an expansion of Pakistan’s Gwadar port, to allow for a greater volume of imports through the China-Pakistan Economic Corridor (CPEC). This allows China freedom from the Malacca strait chokepoint by allowing westward imports to travel overland. To avoid economic isolation through sanctions, they are building CHIPS, an alternative to the SWIFT banking system which currently dominates international financial flows.

• Politically, China has been creating strategic partnerships with much of the developing world first through BRICS, and now through African nations where they have extended 0% Tariffs on all imports from 53 African nations through Forum on China-Africa Cooperation (FOCAC) except for Eswatini due to its links to Taiwan.

Cordoba’s View

• At Cordoba we believe that Chinese actions indicate a long-term strategy of preparation to ensure its survival and a successful invasion of Taiwan. Occupying Taiwan now, will lead to an unsustainable escalation for China due the US’s global dominance militarily, economically and politically. Therefore, Chinas main goal is to steadily decrease American superiority in these domains and the worlds dependency on them.
• In the event of war, the US would utilise their superior military technology and initiate the first chain island defence whilst activating the Malacca choke point. China would be unable to prolong the conflict for more than 90 days due to their heavy dependence on oil as a source of energy. During this time the US would financially isolate China through SWIFT, much like the strategy employed with Russia. Due to their strong political and economic association with the US and to avoid sanctions, many countries would also participate.

• Hence, to avoid these US weapons, China has been placed itself at the forefront of renewable energy.  This aggressive shift will allow much of China, in exception of the military to be independent of non-renewable energy significantly reducing their need of oil. This would mean less dependency on other countries and the Malacca Strait for their energy security. However, even if the Malacca strait was activated the Chinese have mitigated their risk by investing into CPEC through expansion of the Gwadar port. This allows for Chinese imports to bypass the Malacca strait and travel overland. However, if countries were to support China during their invasion of Taiwan, then this could lead to economic sanctions being expanded to include their countries. This is why China has developed CHIPS, an alternative financial payment system that is separate from US hegemony. Countries that will still wish to trade with China will be able to do so, despite US sanctions.

• Most likely, many countries will continue trading with China due to their dependence on them for manufactured goods and because of their political ties. Without Chinese imports many countries would see a rise in inflation, seeing the costs of goods rise which could lead to political instability. However more importantly, China has a near monopoly over rare Earth metals that are crucial to the shift to renewables since FOCAC. In a decarbonised world, minerals are the new oil, Beijing is positioning itself as OPEC without owning the oil themselves. Rather than owning the mine, they have become the world’s leading refiner of raw materials by buying them from Africa then reselling the refined material to those who demand it.

• Through this, China reinforces their monopoly over the supply line of critical resources increasing global dependency, whilst increasing their political clout with the developing world.  If China can successfully enact this shift, then during an invasion of Taiwan, the rest of the world will be politically and economically tied to China such that going against the US political will, provides more benefit than cost. This is something the team at Cordoba will be exploring father to examine which markets will benefit from these activities. 

• Thus, securing new supply routes of oil, forming a monopoly over the critical resources supply chain and signing strategic deals with the countries that hold the new gold, is for the purpose of endure a siege from the US and its allies once they invade Taiwan. However, by being the dependable superpower to the developing world which the developed world is reliant on for resources, creates a dilemma for US allies. Do they suffer the pain with the US who has shown itself to be more isolationist and self-interested during Trumps term, or do they cave to the Chineses slowly rising hegemony.  Ultimately, this is a decades long game for Taiwan, to erode U.S. will, break Taiwanese resolve, and create conditions were taking the island is either a clean sweep or if not, a long-term game of attrition. Behind the military drills and trade deals lies a singular purpose, to prepare the mainland to endure a siege and outlast the world.