5 February 2023, NIICE Commentary 8528
Avinash Singh

Formation of Taiwan

Taiwan, officially known as the Republic of China (ROC) is an island nation in East Asia. It is approximately 100 miles from the coast of southeast China separated by the Taiwan Strait. It shares a maritime border with the People’s Republic of China (PRC) in the northwest, Japan in the northeast, and the Philippines in the south. The Qing dynasty administered Taiwan in the 17th century. After their defeat in the first Sino-Japanese war, they gave up the island to Japan. However, in 1945 China retook the island after the Japanese defeat in World War II. After World War II, two main political parties with different ideologies, the nationalist party (Kuomintang) led by Chiang Kai-shek, and the Communist Party, formed in 1921 and led by Mao Zedong, competed to rule over China, including Taiwan. The nationalist party wanted to establish a constitutional republic, whereas the Communist Party wanted to establish a socialist republic following the principles of Marxism-Leninism. A civil war broke out between the two political parties which culminated with the victory of the Communist Party in 1949 and the formation of the People’s Republic of China under the leadership of Mao Zedong. Chiang Kai-shek fled to Taiwan and ruled the island for several decades. China cites history to claim over the island, however, Taiwan maintains that they were never part of modern China.

China’s Unification Plan

China has planned for unification since the foundation of PRC in 1949. However, since President Xi Jinping came to power in 2013, China’s resolve to retake Taiwan has become even stronger. Territorial ambitions, countering a perceived threat from the US and Taiwan relations, evoking nationalistic sentiments, and the threat of permanent independence of Taiwan through referendum and Taiwan gaining international legitimacy could be the reason China wants to annex it as soon as possible. Communist Party of China (CPC) wants to prevent this from happening as it would question their legitimacy and would probably start a civil war in the country, eventually overthrowing their government.

Consequences of Invasion on China

China’s invasion of Taiwan could turn into a great power war between China and the United States and could have consequences for China’s economic and superpower ambitions. Security concerns in Indo-Pacific and Indian Ocean region will be detrimental to China’s continued economic rise. The US support for Taiwan could prolong the war, and China might invite economic sanctions from multilateral bodies along with the United States, a country with which it has a huge trade surplus. The economic sanctions could be detrimental to its export-oriented economy. Moreover, the war could disrupt Taiwan’s semiconductor industry, which exports half of the world’s semiconductors, consequently affecting China’s electronic manufacturing industry. Apart from the export and import industry, its diplomatic relations, financial markets, business sentiments, and exchange rates will be affected. FDIs will dry up and businesses would want to move out of China further complicating the situation already aggravated by COVID 19 situations.

The Chinese army has not been tested in a war since 1979. It is not sure if the United States will intervene militarily, however, their economic, intelligence, and weapons support to Taiwan could inflict heavy casualties on China. The Taiwan Strait separates China’s most populous and economically potent region from Taiwan. A war could potentially cause heavy losses to China even if they were to win it, thereby hampering its global superpower ambitions. Maritime trade will be disrupted as many of China’s major ports are near Taiwan which will be impacted by the war. In addition, this war could be a starting point to help start a full-fledged civil war brewing up in Xinjiang province and Tibet Autonomous Region, hence internally destabilizing the country.

China has border conflicts with almost all of its 14 neighboring countries. The invasion could trigger an arms race in the region forcing countries to increase their defense spending and pursue nuclear ambitions to deter China. Japan has already announced its new defense plan and most significant military build-up since World War II. South Korea and Australia have their own security concerns owing to Chinese ambition in the region. Recent border skirmishes with India have further solidified the view that countries in the region should be concerned. However, India is a significant regional power in South Asia and the Indian Ocean region, and it could use Andaman and Nicobar Islands to disrupt China’s oil supplies. Moreover, the Indian navy could prevent Chinese ships’ access to the Indian Ocean. India could intensify the scuffle with Chinese soldiers in the Himalayas under the pretext of the Chinese invasion. Though farfetched, India might take the risk of annexing Aksai Chin. India is not a party to China’s Belt and Road Initiative (BRI) and has objections to China Pakistan Economic Corridor (CPEC), which passes through Gilgit-Baltistan – part of Pakistan-Occupied Kashmir (PoK). The invasion of Taiwan could incentivize India to annex PoK, which could have long-term economic consequences for China as it will impact their largest project under BRI. The Philippines and Vietnam would have their own security concerns. These developments could endanger regional stability as some of the world’s largest ongoing conflicts are currently in Asia.

Conclusion

To conclude, the invasion of Taiwan will be detrimental to China’s economy and its superpower ambitions, already hampered by the COVID-19 situation. Chinese people might revolt against CPC, and it could start a civil war in China. Asia is a hotbed of conflicts, and a full-fledged invasion could destabilize the region. Neighboring countries like South Korea, Japan, India, the Philippines, and Vietnam will increase their defense spending and could harbor nuclear ambitions to deter China. The United States will push forward to make QUAD even stronger and have dominance in the Indo-Pacific. The recent border skirmishes with Bhutan and India, the war with Taiwan, and the handling of the COVID-19 situation could question China’s position as a world leader and portray China as an invasive force.

Avinash Singh is a Research Intern at NIICE.