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Context

• The brief visit by the United States House Speaker, Nancy Pelosi, to Taiwan, against stern warnings issued by China, has the potential to increase the already deteriorating relationship between the U.S. and China.
• The move severely undermined China’s perception of sovereignty and territorial integrity.
• For the US, the visit was aimed at expressing that “America’s determination to preserve democracy in Taiwan and in the world remain iron-clad”
• This makes the topic important for the coming Mains Examination for GS-2 paper under international relations and also for Political science and international relations optional.

How did China respond to the visit?

• Increased military exercises around Taiwan: Military exercises around Taiwan have been expanded, with Chinese aircraft intruding more frequently across the informal median line which defines the zone of operations on each side.
• Increased naval presence: Chinese naval ships are cruising within the Taiwan Straits and around the island itself.
• Economic sanctions: have been announced, prohibiting imports of a whole range of foodstuffs from Taiwan.

What is the issue between China and Taiwan?

• Taiwan is an island about 160 km off the coast of south-eastern China, opposite the Chinese cities of Fuzhou, Quanzhou, and Xiamen.
• It was administered by the imperial Qing dynasty, but its control was passed to the Japanese in 1895.
• After the defeat of Japan in World War II, the island passed back into Chinese hands.
• After the communists led by Mao Zedong won the civil war in mainland China, Chiang Kai-shek, the leader of the nationalist Kuomintang party, fled to Taiwan in 1949.
• Chiang Kai-shek set up the government of the Republic of China on the island and remained President until 1975.
• Beijing has never recognized the existence of Taiwan as an independent political entity, arguing that it was always a Chinese province under its ‘One China Policy’
• The PRC considers the island as a renegade province awaiting reunification by peaceful means, if possible.
• This has generated strong opposition from the Taiwanese government and people. To protect its sovereignty, Taiwan remains closer to the US, buying weapons from it and thus irking China.
• This has become a major bone of contention between the two.

What is the ‘One China policy?

• It is the diplomatic acknowledgment of China’s position that there is only one Chinese government.
• Under the policy, a country should recognize and have formal ties with China rather than the island of Taiwan, which China sees as a breakaway province to be reunified with the mainland one day.
• The policy is also a fundamental bedrock of Chinese policy-making and diplomacy.
• However, it is distinct from the One China principle, whereby China insists Taiwan is an inalienable part of one China to be reunified one day.

How did it come about?

• The origin-The policy can be traced back to 1949 and the end of the Chinese civil war.
• The defeated Nationalists, also known as the Kuomintang, retreated to Taiwan and made it their seat of government while the victorious Communists began ruling the mainland as the People’s Republic of China.
• Both sides said they represented all of China.
• Since then China’s ruling Communist Party has threatened to use force if Taiwan ever formally declares independence, but it has also pursued a softer diplomatic track with the island in recent years.
• Taiwan’s government was set up by the Kuomintang, whose party logo is reflected in Taiwan’s flag
• Initially, many governments including the US recognised Taiwan as they shied away from Communist China.
• But the diplomatic winds shifted as China and the United States saw a mutual need to develop relations beginning in the 1970s, with the US and other countries cutting ties with Taipei in favour of Beijing.

US and One-China Principle

• PREVIOUS SITUATION– Officially, the US has subscribed to PRC’s “One China Policy” which means there is only one legitimate Chinese government.

• With the shifting geopolitics of the Cold War, the PRC and the U.S. were forced to come together in the 1970s to counter the growing influence of the USSR.
• This led to the US-China rapprochement demonstrated by the historic visit of then US President Richard Nixon to PRC in 1972.
• The same year, the PRC displaced ROC as the official representative of the Chinese nation at the UN.
• Diplomatic relations with the PRC became possible only if countries abided by its “One China Principle” — recognizing PRC and not the ROC as China.
• CURRENT SITUATION– But now, the US backs Taiwan’s independence, maintains ties with Taipei, and sells weapons to it. The policy saw a shift from Donald Trump’s presidentship.
• Taiwan is entirely dependent on the US for its defence against possible Chinese aggression.
• This is why every spike in military tensions between China and Taiwan injects more hostility into the already strained relationship between Washington and Beijing.

Importance of Taiwan for China

• TSMC (Taiwan Semiconductor Manufacturing Company) is the largest foundry in the world and holds around 65 percent of the global production of chips.
• Any potential conflict with China would completely disrupt the entire supply chain of TSMC and labor availability and could cause a major shortage of electronic chips.
• Additionally, China controls five percent of the global production of chips, which could also be affected.
• This could further impact the already existing supply-demand gap for electronic components.

Importance of Taiwan for the US

• Strategic importance– After Japan, Taiwan is the geographically closest friendly territory around China for US in the Indo-Pacific region.
• Economic importance– US-Taiwan have a bilateral trade of $105 billion with US high dependence on Taiwanese semiconductor chips.
• Gaining lost credibility– the current crisis is about re-establishing steadily diminishing American credibility in the eyes of friend and foes through Taiwan.

Importance of Taiwan for the world

• Leading semiconductor manufacturer- Taiwan is the world’s leading producer of semiconductors and other electronic components. The Taiwan Semiconductor Manufacturing Company (TSMC) has more than 55 per cent of the global market share.
• It might be more accurate to say that “semiconductors are the new oil” and their production is increasingly dominated by Taiwan and the TMSC.

Impact of the crisis on US-China relations

• Cancellation of 3 key military dialogues- the theatre command meet, defence policy coordination talks and the talks under the military maritime consultative agreement.
• Further degradation of ties– the crisis would lead to further degradation of bilateral ties two super powers of the world which will also lead to spilling of consequences to other regions, countries and sectors.

India Taiwan relations

• 25^th year– India and Taiwan are celebrating 25 years of their partnership.
• Mutual efforts– efforts between Delhi and Taipei have enabled a range of bilateral agreements covering agriculture, investment, customs cooperation, civil aviation, industrial cooperation and other areas.
• Creating political framework– Both partners have increasingly deepened mutual respect underpinned by openness, with democracy and diversity as the key principles for collective growth.
• Deepening economic ties– India’s huge market provides Taiwan with investment opportunities. The signing of a bilateral trade agreement in 2018 was an important milestone.

What should be India’s approach?

• Advantageous for India- In one sense, China’s preoccupation with its eastern ocean flank of the Yellow Sea, the Taiwan Strait and the South China Sea is good for India.
• Diminishes Chinese attention- toward the Indian Ocean, India’s primary security theatre.
• Adhere to One China Policy- Prudence demands that India hew closely to its consistent one China policy even while maintaining and even expanding non-official relations with Taiwan.
• QUAD factor– For the US, Japan and Australia, members of the Quad, Taiwan is a key component of the Indo-Pacific strategy.

What are the lessons for India in the crisis?

• Articulate red lines– The most important lesson from the Taiwan standoff for policymakers in New Delhi is the importance of articulating red lines and sovereign positions in an unambiguous manner.
• Avoid appeasement- Appeasement of China, Taiwan knows, is not the answer to Beijing’s aggression. India’s policy of meeting/hosting Chinese leaders while the Chinese People’s Liberation Army (PLA) continue(d) to violate established territorial norms on the LAC is a deeply flawed one.
• Economic relationship is a two-way process- India for sure should do business with China, but not on China’s own terms.

Way forward

• Avoiding any escalation- both sides should maintain a restraint from further escalation of tensions keeping diplomatic channels open and actively pursuing back channel diplomacy.
• Respecting each-others sensitivities– on important unclear matters like Taiwan and taking up the trust building process.

• More Realistic approach by India– also, New Delhi must begin to deal with Taiwan as a weighty entity in its own right that offers so much to advance India’s prosperity.
• Wide view– Delhi does not have to discard its “One-China policy” to recognise that Taiwan is once again becoming the lightning rod in US-China tensions.

Conclusion

• After implanting “democracy with Chinese characteristics” in Hong Kong, thus, strengthening ‘One China Policy’, Taiwan is the next target.
• As Taiwan becomes the world’s most dangerous flashpoint, the geopolitical consequences for Asia and the world are real. A restraint from all sides is thus a sine qua non.
• Although New Delhi has embraced the Indo-Pacific maritime construct, it is yet to come to terms with Taiwan’s critical role in shaping the strategic future of Asia’s waters.

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