Taiwan, despite being only a small island, is an essential piece on the international board
Taiwan is an island the size of Extremadura, where twenty-four million people live but which plays a fundamental role in international relations. The Russian invasion of Ukraine suddenly reminded us that wars of occupation still exist and that some nations absolutely despise peaceful countries (consider us weak) and are ready to resort to war to subdue their neighbors.
On the one hand, politics
Taiwan has existed since the Chinese civil war between Republicans and Communists ended with those refugees on the small island 100 miles from the coast. For over seventy years, Taiwan has insisted on being the legitimate government of China in the face of the Communist coup, while the Communists have been calling for the reunification of the entire country under the cloak of the Chinese Communist Party.
While a communist system was being applied in China, misery was rampant across the country (this is communism) and rich and democratic Taiwan grew economically, leaving its continental brethren behind. But once mainland China openly embraced capitalism, it felt empowered to start its crusade for reunification. The Chinese military has grown wildly in recent years.
The main guarantor of Taiwan’s independence is the United States. Taiwan is the spearhead of US influence in the Western Far East. In no case could it allow the Chinese invasion of Taiwan because it would be a message of weakness that would be perfectly understood by both the Chinese invaders and the countries that trust the US leadership to support the pro-Western democracies of Southeast Asia. This is why visits by US public officials are so important, like Nancy Pelosi’s recent visit, because they reflect the US government’s interest in maintaining the current status quo, regardless of whether they continue to support the idea of the one China, as long as Taiwan democratically agrees to join mainland China. This will not happen as the standard of living and democratic freedoms enjoyed by Taiwanese citizens are still an infinite distance from what the Communist Party of China can provide to its citizens.
On the other hand, chips
In recent months, global dependence on these chips has also placed them at the center of growing tensions between the US and mainland China over Taiwan.
Taiwan produces the vast majority of the advanced chips used in today’s electronics. Therefore, there are fears that a blockade around Taiwan could create a humanitarian and trade crisis, ultimately disrupting the world’s access to tons of critical technology. Even the simplest chips will be difficult to access, just because demand far exceeds supply.
Recent military maneuvers across the Taiwan Strait have raised the possibility that China may end up blocking the island’s exports, which would disrupt all kinds of technological production as a war would inactivate its factories.
The United States is trying to anticipate this scenario. Earlier this summer, Biden signed the CHIPS and Science Act, a huge package to invest tens of billions of dollars to build new semiconductor factories in the United States. Other countries with a history of chip manufacturing, such as South Korea, Japan and some European Union member states, have also begun to increase their production capacity. An Apple supplier even said in February that it would switch to semiconductors made in India, which is also developing its own chip industry.
As recent years have painfully demonstrated, relying on a single region for critical supplies can backfire. In the midst of the war in Ukraine, Russia cut off much of Europe’s access to gas, creating an energy crisis that forced countries to restart coal-fired power plants and abandon renewable energy targets. In the first weeks of the Covid-19 pandemic, China, which was home to half of the world’s manufacturing capacity for masks, restricted exports of medical equipment. And when the vaccine was first launched, the United States and other wealthy nations prioritized inoculating their own citizens before sending supplies to other countries.
As Russia’s war in Ukraine continues, the world is slowly moving away from Russian oil and gas. But the same is not true for chips, which will become increasingly critical as new technologies become more popular and require even more computing power. Electric vehicles, for example, need twice as many chips than traditional internal combustion vehicles, and the rise of 5G, the technology that could make remote surgeries and self-driving cars a reality, will also create an increase in demand for semiconductors.
For all of this, the stakes in Taiwan are becoming increasingly important.
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