Taiwan’s current success is truly inspiring. The island stands out as a beacon of liberal democratic values in Asia, while also being a technological and economic powerhouse. If it were a nation, it would be vying for entry to the G20. As it is, Taiwan serves as the world’s pre-eminent supplier of semiconductors, especially of the most advanced kind, while the Taiwan Strait is an essential part of East-West maritime trade routes.
Without Taiwan’s expertise in chip fabrication, we would struggle to maintain the technology that eases our daily lives, that powers our economy and that our military needs to keep us safe.
Equally, if trade were to stop flowing through the Taiwan Strait, our economy, along with that of the whole world, would take a catastrophic hit. The news is rightly full of the Houthi attacks which are posing a threat to commercial traffic through the Suez canal. Consider that a staggering 80% of the world’s largest container ships and 40% of the whole global container fleet passes through the Taiwan Strait every year.
Thanks to Xi Jinping, all this is currently at risk. Having committed himself to the unification of Taiwan to the mainland, Xi is building up China’s military at an unprecedented rate, with the goal of being ready to invade by 2027. In his recent new year’s message, Xi spoke of the annexation of Taiwan as a historical inevitability.
If Xi does give the order to attack Taiwan, or even if he attempts a naval blockade, it will shake the world. Likely casualties have been estimated at half a million souls. Bloomberg’s latest analysis suggests a war would cost the global economy a staggering $10 trillion, 10% of its value. That would far outstrip the economic impact of the pandemic or the financial crisis. Even a blockade would bring a 5% hit to the global economy.
Disaster is not inevitable, and Britain has a vital role to play in resolving this looming crisis. A new report by Darren Spinck for the Henry Jackson Society lays out the steps we can take to help keep Taiwan democratic and free.
First, Rishi Sunak’s goal of 2.5% of GDP spent on defence needs to become an immediate commitment, not a vague future aspiration, with a view to raising it to 3% as soon as possible. Taiwan too, needs to be encouraged to invest more in its own arsenal. While Britain cannot supply weapons without crossing China’s red lines, we can help, in a mutually beneficial way, by selling Taiwan components for defence systems. We must also help keep deconfliction channels with the Chinese military open.
Alongside helping to maintain military deterrence, we must also publicly assert our friendship for Taiwan, as Lord Cameron has done by congratulating President Lai on his election. Another recent success has been the UK-Taiwan enhanced trade partnership agreed in November. As we join the CPTPP trade pact, we should advocate for Taiwan to join as well: another win-win.
Fundamentally, we must understand that recognising Taiwan as independent would only make the situation worse. At the same time, however, we should make clear to Beijing that Britain has its own red lines in the Indo-Pacific that cannot be crossed without a fundamental reassessment of UK-China relations.
Finally, we must prepare for the worst. If Ukraine has taught us anything, it is that dictators with a sense of historical mission cannot always be deterred. In particular, that means better planning to mitigate the impact of severe disruption to the supply of semiconductors.
Post-Brexit, Britain has rightly committed itself to an Indo-Pacific tilt, turning to the region where tremendous growth opportunities lie in the years ahead. As part of that commitment, we must do all we can to keep the Indo-Pacific free and open. Taiwan may seem far away and distant from our own concerns. But if China’s ambitions are not held in check, we will not be able to isolate ourselves from the fallout.
Marc Sidwell is the Director of Research for the Henry Jackson Society – a trans-Atlantic foreign policy and national security think tank
The people of Taiwan have spoken: the island’s newly-elected president is Lai Ching-te, leader of the Democratic Progressive Party (DPP), returned to power for a third consecutive term – a new record. This confirms the commitment of the Taiwanese people to self-government, and was – as such – not the result wanted in Beijing.
Across the Taiwan Strait, President Xi Jinping has other plans for what he sees as a rebel province. In recent years, Xi’s calls for Taiwan to merge with his authoritarian empire have become increasingly belligerent. The stakes remain high, and as Taiwan prepares for President Lai’s inauguration in May, China may well seek to flex its muscles.
If China does so, Britain must keep a cool head. Upending the fragile status quo would have almost unimaginable consequences for Britain and the world.