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Date: 2024-03-29 Page is: DBtxt001.php txt00020634 |
Geopolitics | ||
Burgess COMMENTARY Peter Burgess | ||
Original article:
https://www.eiu.com/n/is-war-between-china-and-taiwan-inevitable/
The EIU Update ... Is war between China and Taiwan inevitable? China and Taiwan conflict Is war between China and Taiwan inevitable?
An attempt to take Taiwan by force remains very unlikely We nevertheless continue to expect China to refrain from purposefully initiating a direct conflict with Taiwan. China’s president, Xi Jinping, is sometimes described as seeing cross-Strait unification as a legacy issue, and one to facilitate the indefinite extension of his own term in power. In addition to political factors, Taiwan holds economic assets that could be valuable for China, including its cutting-edge semiconductor production capacity. Capturing such assets could potentially help China to accelerate its chip self-sufficiency goals. However, the potential costs of a move to take Taiwan by military force significantly outweigh the benefits for China. While the cross-Strait balance of military power tilts significantly in favour of China, it would still be a highly risky operation. The US retains a position of strategic ambiguity in relation to Taiwan’s defence, but we believe that it would intervene militarily to support Taiwan in the face of Chinese aggression. US regional security partners, such as Japan and Australia, could also have some level of involvement. Alongside Taiwan’s own defence capabilities, this would mean that a Chinese attack would involve significant cost and would risk failure. Even if China took Taiwan militarily, it would subsequently face international isolation as at least Western, democratic countries implemented reprisal measures, including sanctions and (potentially) trade embargos. This would have a significant economic cost for China and upset its development and global leadership plans. The integration of Taiwan into China’s governance structures would also be a daunting task, and Chinese authorities would probably have to contend with a restive and potentially rebellious local population. A devastating military conflict would probably also risk wiping out Taiwan’s semiconductor industry, through either collateral damage or deliberate self-sabotage, thus eliminating the perceived economic or technological benefits of an invasion. At the very least, disruption to Taiwanese manufacturing clusters, infrastructure, logistics networks and talent bases would inevitably shock the island’s industry, while US economic reprisals could include export controls targeting Taiwanese fabrication plants that fall under Chinese control. For such reasons, a direct attack remains a very unlikely course of action, despite the presence of some political and economic drivers. Potential triggers for a military escalation A shift in rationale in China’s calculus in favour of military intervention would require fairly unlikely developments. Potential triggers or “red lines” for stepped-up Chinese actions probably include:
Ongoing strategic and economic pressure Still, even outside a direct conflict there remains significant scope for cross-Strait relations to worsen. We expect China to maintain its tactics of intimidation, including regular incursions into Taiwan’s claimed airspace. These moves will complement China’s other “grey zone” tactics against Taiwan, which include international isolation and the poaching of diplomatic allies, along with disinformation via Taiwanese media channels and cyberattacks on government (or corporate) targets. We also anticipate intensification of economic pressure. This will include poaching the island’s talent and intellectual property. Complementing these threats will be China’s industrial policy ambitions, aimed at achieving self-sufficiency in semiconductors, particularly at the low-to-medium end of the supply chain. This should ring alarm bells for Taiwanese companies and officials, particularly as US export controls restrict commercial dealings between China and the island’s most innovative firms, effectively squeezing the island’s chip industry from both sides. The goal of China’s strategic and economic pressure is to position cross-Strait unification as Taiwan’s sole choice for future preservation. China hopes that this will eventually create the conditions necessary to force Taiwan into such negotiations, under its terms. In reality, given domestic opposition within Taiwan, this scenario is unlikely to occur, suggesting that the cross-Strait status quo will continue to hold. Managing cross-Strait risk A wholesale shifting of supply chains is probably too extreme a risk-mitigation strategy in response to heightened cross-Strait tensions, considering the low likelihood of conflict. Nevertheless, we counsel firms to monitor the level of anti-Taiwan rhetoric in Chinese state media. As the diplomatic impression of US-Taiwan-China ties becomes increasingly complex, companies should also be aware of how they list “Taiwan” in their public-facing materials (including marketing and merchandising activity), including by understanding the risks facing their China-based operations should the Chinese government weaponise public sentiment against them. Firms should also ensure clarity over the durability of supply chains linked with Taiwan, including by understanding where key vulnerabilities exist (especially for just-in-time inventory and sourcing). This should also involve mitigation strategies that consider alternative or back-up partners and shipping routes in the event of a conflict. We monitor the world to help you prepare for what’s ahead. Find out more about EIU Viewpoint, all the political, economic and market insights you need to succeed.
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| Wed, 16th Jun 2021 The text being discussed is available at | https://www.eiu.com/n/is-war-between-china-and-taiwan-inevitable/ and |
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