12.12.2022 Author: Vladimir Terehov

Development of the Taiwan problem

Since NEO published its last article on this issue the most significant development in relation to the Taiwan problem has clearly been the local elections, with their unexpected results.

In terms of their implications for Taiwan’s foreign policy, the most important aspect of the election results is that they raise the prospect of a potential change of government following next year’s parliamentary and presidential elections. And a change of government would have serious implications for each of the main foreign players with a stake in the geopolitical maneuverings related to the Taiwan problem.

Clearly Washington, the most significant of these players, is making the best of the opportunities provided by the fact that the Democratic Progressive Party and President Tsai Ing-wen have retained their hold on power for the last year of the presidential term. Ever since the beginning of 2016, when they came into office, they have demonstrated an absolute loyalty to the “collective West” (which is still showing signs of life) and particularly to its leader, the USA.

It may be that in stepping up its activities in relation to Taiwan (an entirely predictable development) Washington is hoping that it will earn enough political capital over the next year or so to put Taipei – and the country’s next leader – in its debt. Judging by the recent local election results it is very possible that the next national government may be formed by the Kuomintang, whose position in relation to mainland China is very different from that of the current government. It tends to have a much more positive attitude to the PRC, and, conversely, is more suspicious of the USA.

As a result of the above, over the next year we can expect to see Washington stepping up its efforts to have Taiwan treated as a fully-fledged member of the international community. That would make it easier for Taiwan to be admitted to various international organizations, especially such UN bodies as the WHO, the ICAO and the IAEA.  That is despite the fact that Washington continues to pay lip service to the “one China” principle, as it did, for example, during the recent meeting between the US and Chinese leaders during the GH20 summit in Indonesia.

As part of the same trend, we can expect to see the development of bilateral relations between the USA and Taiwan in the same areas which are typically covered by treaties between “normal” states. This means that the supply of US arms to Taiwan will continue, as will talks on the conclusion of a certain trade agreement, contacts between civil servants from both countries will be strengthened, and in general the format of economic relations between the two countries will become more complex.

In recent months US-Taiwanese economic relations have focused on the high tech sector, specifically the manufacture of “chips” – a word which these days has an almost magical quality to it. The very mention of that word fills some nations with a quite understandable sense of horror, especially those who face a shortage of these essential semiconductors, while others, who have no such problem, are free to engage in international political games without a qualm of regret.

The USA belongs to the latter group – as it has access to all the chips it needs thanks to its links with the world’s largest manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC). The present author sees the TSMC’s location (it is based in Taiwan and employs 50,000 Taiwanese citizens) as the most important reason why Beijing is unlikely to resort to a “non-peaceful solution” to the Taiwan problem. After all, Beijing, no less than Washington, has an interest in ensuring that this Taiwanese company continues to manufacture its essential products.

But the US has an even more pressing concern – it wants to free itself from dependence on foreign suppliers of chips, which are an essential element in modern electronic equipment, whether designed for civilian or military use. That is why the Trump administration entered into a $12 billion contract with TSMC for the construction of a chipmaking plant in the US state of Arizona. The Arizona plant will make 5nm chips – no longer the most advanced category, but it has been reported that TSMC may enter into a contract for the manufacture of a second plant, also in Arizona.

The current factory was originally to have been up and running by 2025, but the deadline was recently moved back a year. On December 6 US President Joe Biden was scheduled to visit the plant site for its launch ceremony.

TSMC is also building chipmaking plants in other countries, including Japan. This international growth, combined with the expansion of its production operations in Taiwan, has raised fears that the company may experience staff shortages. After all, in order to train foreign (i.e. non-Taiwanese) specialists to operate its equipment TSMC is sending 500 engineers to the plant in Arizona, possibly for an extended period.

As for the drive to strengthen relations between the US and Taiwanese governments at various levels, after Nancy Pelosi’s much discussed visit to Taipei it was the state governors’ chance to get to work. At the beginning of December, a US delegation headed by Idaho governor Brad Little went on a four-day business to Taiwan. At the end of the trip (as usual in such cases) the delegation is expected to met with President Tsai Ing-wen, and, also in line with tradition, she is expected to thank them for the visit.

Europe and Japan also frequently send delegations to Taiwan, and Tsai Ing-wen invariably has meetings with these visitors. It should once again be noted that the governments of these latter countries (unlike certain more reckless states on the edge of Eastern Europe, which have little to lose) are trying to keep open the possibility of maintaining good business relations with China. They are therefore careful to send delegations which consist of parliamentarians who are not part of the official state administration.

The recent trip to Taiwan by the UK’s Minister of State at the Department for International Trade, Greg Hands, was an exception to the above trend. It is still too early to say whether Greg Hands’ trip was an anomaly or an integral part of Britain’s still developing foreign policy under Prime Minister Rishi Sunak and his new cabinet. But one thing is clear: if that visit is an indication of closer relations between the Taiwanese and British governments then there is little hope for improvement in Britain’s relations with China.

In an attempt to distance himself from a week-long trip to Taiwan by an Australian parliamentary delegation, which began on December 5, the prime minister, Anthony Albanese, was forced to issue an “explanation” of his government’s position in relation to the above issue. However, his task was complicated by the fact that the delegation included representatives of his own ruling coalition as well as of the Conservative Party, now in opposition.

Here it should be noted that Australia, unlike Europe, is seen as an important regional power. That explains why China attached so much importance both to the trip by the Australian parliamentary delegation and the “explanation” offered by Anthony Albanese. The latter’s center-left coalition, which came into power in May following its general election victory has shown a willingness to reverse, at least in part, the deterioration in relations with China during successive Conservative governments over the last ten years. The most notable anti-Chinese initiatives during that period included Australia’s accession to the QUAD and AUKUS grouping.

Given the above background, Anthony Albanese’s speech at the most recent APEC forum in Bangkok was of particular interest. Speaking about the suggestion that Taiwan might join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a regional trade group, he insisted that membership of that body was reserved for “recognized nation states.”

This response was a blow to Taiwan and was no doubt especially humiliating because a Taiwanese delegation was attending the forum. Taiwan is, however, a member of APEC, which is open to “economies” rather than “states,” a distinction which Anthony Albanese emphasized in his speech.

It is also impossible to exclude the possibility the appointment of Penny Wong as Australian Foreign Minister has sent positive signals to China. As far as international relations are concerned, however, the main message from that appointment is doubtless that the new Australian government is ready to join the current global ideological mainstream.

Nevertheless, if there is real progress in the renewal of the positive relations with China which were perhaps the most notable achievement of Australia’s last left-leaning administration (2008-2013) then that would cause yet another serious division within the “collective West.”

The new Australian government, however, as already noted, is limited by the heavy burden which it has inherited from the previous Conservative administrations.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook.