The United States could make another Ukraine out of Taiwan

The recent developments involving Taiwan – including the US and China – must be viewed against two backdrops. First, the blunders the US and NATO have committed in their approach towards Ukraine and Russia. Second, the scant regard the US has towards norms, international law and respect for sovereignty.

This has been extremely well documented by the likes of Harold Pinter in his Nobel Award speech in 2005. And it has been articulated by several analysts of geopolitics across the world ever since. The botched Ukraine strategy has only caused huge losses of life and property to what was once Ukraine. It has almost crippled the economic underpinnings of the EU. And it has left Russia more powerful and wealthier than before the war.

Is this sane?

So why is the US creating a crisis in the Taiwan Straits even before the Ukraine misadventure is concluded?

There could be two reasons. First, just as it seduced Ukraine into applying for NATO membership, it could be trying to do the same with Taiwan as well. Second, both countries – USA and China – have elections of sorts in their respective territories. The US could have been trying to embarrass the China premier Xi Jinping by sending Pelosi to strengthen ties with Taiwan. The US knew that this would rile China. And it succeeded in doing that. As always, the US was playing a game of brinksmanship, even though it could lead the world into a third world war, with – almost certainly – no winners or survivors.

China’s response of firing live missiles into the waters around Taiwan did three things. First it underscored the oral statement that China would not hesitate to use arms, even if meant crippling Taiwan (which has the same Han population as much of Mainland China).

The message was loud and clear – try getting closer to the US (or NATO) and you will put your entire territory at risk. The Ukraine outcome is there for everyone to see.

It also helped China assuage some tempers at home.

But more importantly, it turned the spotlight on the vulnerabilities of Taiwan. It also let all the ASEAN neighbours better appreciate the consequences for all of them, as the entire South China seas right up to the Malacca Straits would be on fire.

It also drove home the point that Taiwan’s plight could be worse than that of Ukraine.

Big differences

Some of the key differences were brought out brilliantly by The Diplomat in the last week of July this year.

First, China is more formidable than Russia. “Economically, China has the second largest GDP in the world. As of 2021, China’s GDP was 76 percent of the US,” says The Diplomat.

In contrast, Russia’s GDP was less than 10 percent of that of the US. Moreover, China’s economic growth is more sustainable than either Russia or USA, because it also has a large domestic market. It must also be noted that China is much better connected to the world economy than Russia (which, like Australia, depends largely on its mining wealth).

Taiwan’s vulnerabilities

And when one looks at Taiwan, you realise that it is terribly vulnerable. It is extremely dependent on China. The US cannot bridge the gap, partly because the seas would be on fire, crimpling businesses for all Southeast Asian countries, including Japan.

To better appreciate Taiwan’s vulnerabilities, it is essential to study the economic underpinnings of this island.

Taiwan may be a formidable player in global markets, but its trade surplus is slim. What is more important is that much of the trade surplus takes place because its biggest customer remains China. If China stops importing from Taiwan, the latter could witness a steep decline in its export earnings and may get wrecked financially.

Not that China will stop importing from Taiwan. It will probably create conditions that Taiwan will not be easily able to sell to any other country, but to China, and thus become more dependent on its significantly larger neighbour China is a country that knows how to win a war without actually fighting and killing people.

That was one of the cornerstone principles in Sun Tzu’s book ‘The Art of War’. Taiwan too knows this, because its people have the same cultural roots. But the US doesn’t. That that is why like the proverbial bull in a China shop, it will end up breaking up almost everything for Taiwan.

China’s embrace

One possibility is that China will find ways to purchase more and more from Taiwan and then re-export those items under made-in-China brands. This has been done before by several countries. China may do this again. And any country that tries to intervene, could be warded off by claiming better control over the Malacca Straits and the South China Seas.

China will not give the US an opportunity to create a war, where the casualties belong to another nation, but the profits from the sale of weaponry accrue to the US alone.

Expect variations along this theme, and the coming years will see China becoming even more formidable, as it shifts its oil dependency to countries that do not use the Malacca Straits. It will increase its oil sourcing to Russia and from its satellites like Turkmenistan and Kazakhstan. Jawahir Mulraj, a brilliant analyst, explains the emerging situation.

Then, look at Taiwan’s import profile.

Taiwan imports mostly parts of electronic products (18.2% of total), mineral products (15.2%), machinery (12.4%), chemicals (10.8%) and base metals (7.3%). Main import partners are Mainland China & Hong Kong (19.6% of total), Japan (17.6%), Europe (12.6%), USA (12.4%), ASEAN countries (11.8%) and Middle East (7.7%).

And its biggest import partner remains Mainland China and Hong Kong (19.6% of the total). Expect this number to surge as well, as China tightens passage rights to ensure that the US does not make another Ukraine out of Taiwan.

Three deterrents

There are people who believe that in the case of Taiwan, the US will not be as belligerent as it was in the case of Ukraine. Three reasons come to mind.

First, having got a bloody nose from Russia, it will avoid getting another painful blow from China. That would wreck the electoral chances of Biden and company.

Second, the EU, including counties like Germany and France and a host of others decided to go along with the US to support Ukraine. It is unlikely that the same level of cooperation will be forthcoming in Asia. Asian countries, by and large, are not as belligerent or warmongering as much from the Western world. Moreover, unlike Ukraine which had other countries adjoining it, Taiwan has none.

But there is a good third reason as well. In the case of Ukraine, some of the most powerful US corporations had sunk in huge investments. As the Australian National Review points out, “Three large American multinationals bought 17 million hectares of Ukrainian agricultural land. These are Cargill, Dupont, and Monsanto (which is officially German-Australian but with American capital). Five percent of Ukrainian agricultural land was subsequently purchased by the Chinese state. For comparison, the whole of Italy has 16.7 million hectares of agricultural land.”

There are unconfirmed reports of other investments by key US players. In other words, personal stakes of very powerful US players could have provided a greater impetus to prodding on Ukraine to join NATO and to thumb a snook at Russia. That turned out to be a very bad and costly mistake.

This may not be the case with Taiwan. China’s hold over this island is bound to increase. The US just gave it a very compelling reason why the process should be expedited.

The author is consulting editor with FPJ