The trade dispute between the United States and China won’t be getting any worse, at least for the next few months. That’s good. But lurking behind the truce announced this weekend in the tariff war are plenty of other issues that may prove more dangerous.
In other words, it’s time to start paying attention to Taiwan again.
Meeting in Buenos Aires on Saturday, President Donald Trump and Chinese President Xi Jinping agreed to restart talks on their trade differences. Trump agreed to put off higher tariffs on Chinese products set to go into effect Jan. 1, and Xi agreed that China would buy more U.S. goods. Time will tell whether this is real progress, or merely a lull.
In contrast, tensions over Taiwan have been a constant for nearly 70 years. Both sides have learned to manage the dispute, avoiding a blow-up and playing for long-term advantage. Yet developments in China and in Taiwan suggest that intentional ambiguity over Taiwan’s status can’t last forever. Plus, neither Trump nor Xi has much use for conventional wisdom or the status quo.
Even as the trade dispute took center stage this year, some analysts predicted the next big conflict could be over Taiwan.
China’s Nationalist government fled to Taiwan when it lost the civil war to the Communists in 1949, establishing itself there and maintaining that it still was China’s legitimate government. But China regards the island, located 110 miles off its coast, as an integral part of its territory and wants to re-incorporate it under rule from Beijing. The U.S. long has served as Taiwan’s chief protector. (The Council on Foreign Relations produced a handy primer on the issue earlier this year.)
China has been counting on its economic power and implied coercion to bring Taiwan back into its orbit. As the mainland’s economy developed, Taiwanese business flooded in – as did Taiwanese workers. According to the Economist, about 10 percent of Taiwan’s workforce now lives on the mainland. Mainland China accounts for nearly a third of Taiwan’s total trade. And if carrots won’t work, perhaps sticks will. China has deployed missiles along the Taiwan Strait, and made military shows of force to intimidate Taiwan. It reserves the right to use force to reunite Taiwan with the mainland.
Politically, it is the Kuomintang political party, successor of the mainland Chinese Nationalist government, that in recent years has pursued closer ties with Beijing. It agrees that China and Taiwan are part of the same country – but still disagrees with Beijing on who should be running it. Taiwan’s former president, Ma Ying-jeou of the KMT, signed a free-trade agreement with Beijing and held a historic meeting with Xi.
As time goes on, however, instead of identifying more closely with China, residents of Taiwan are going in the opposite direction. In one oft-quoted survey, respondents are asked regularly how they think of themselves. While the percentage that identifies as both Chinese and Taiwanese has declined modestly, those who consider themselves exclusively Chinese has plummeted. The proportion who regard themselves as Taiwanese only rose sharply – from about 18 percent in the first survey to 55 percent 25 years later. If there ever was a time when Taiwan could simply be enticed into reunification, it seems well past.
Taiwan’s other main political party, the Democratic Progressive Party, includes a faction favoring outright independence. Taiwan’s current president, DPP member Tsai Ing-wen, has been cautious on the issue but still faces a pressure campaign from China. Her party suffered big losses in local elections last weekend. That may cheer authorities in Beijing, but probably reflects frustration with her domestic policies more than her China policy.
What do Xi and Trump do about this?
There has been a lot of saber-rattling. China carried out live-fire military drills in the Taiwan Strait in April, and more maneuvers in June. For the third time this year, the United States send a pair of military ships through the strait last week.
For Xi, gaining sovereignty over Taiwan is an important part of making China great again. It’s not only about economic power, plus heightened status in the region and the world. It’s about what Chinese officials regard as territorial integrity. It will be hard for Xi to back down – particularly, some analysts argue, if China starts struggling economically.
As for Trump, he broke precedent, and angered China, by accepting a phone call from Tsai even before he was inaugurated. The U.S. has for decades sold arms to Taiwan, but under Trump some observers say the sales appear more frequent and more routine.
National Security Adviser John Bolton has suggested in the past that the United States play the “Taiwan card,” threatening to build closer formal relations with Taiwan, in order to get what it wants from China on other contentious issues.
Bolton has a couple of things right. Taiwan doesn’t exist in a vacuum, and relations with China are testy. Even so, chances are that China, the United States and Taiwan will muddle through the next couple of years. They have managed tense times before. But the status quo appears increasingly fragile. If someone cracks it – intentionally or by accident — we’re not risking a trade war. We’re risking a real war.