Patrick Mendis & Antonina Luszczykiewicz
Tensions in the Taiwan Strait
Shao-cheng Sun
Tran Thi Duyen
Tobias Burgers
Vaccine Diplomacy in the Indo-Pacific
Man-Jung Mignonne Chan
Man-Jung Mignonne Chan
Tobias Burgers
Shao-Cheng Sun
Submissions: Essays submitted for publication are not to exceed 2,000 words in length, and should conform to the following basic format for each 1200-1600 word essay: 1. Synopsis, 100-200 words; 2. Background description, 100-200 words; 3. Analysis, 800-1,000 words; 4. Policy Recommendations, 200-300 words. Book reviews should not exceed 1,200 words in length. Notes should be formatted as endnotes and should be kept to a minimum. Authors are encouraged to submit essays and reviews as attachments to emails; Microsoft Word documents are preferred. For questions of style and usage, writers should consult the Chicago Manual of Style. Authors of unsolicited manuscripts are encouraged to consult with the executive editor at xiongmu@gmail.com before formal submission via email. The views expressed in the articles are the personal views of the authors and do not necessarily represent the views of their affiliate institutions or of Strategic Vision. Once accepted for publication, manuscripts become the intellectual property of Strategic Vision. Manuscripts are subject to copyediting, both mechanical and substantive, as required and according to editorial guidelines. No major alterations may be made by an author once the type has been set. Arrangements for reprints should be made with the editor. The editors are responsible for the selection and acceptance of articles; responsibility for opinions expressed and accuracy of facts in articles published rests solely with individual authors. The editors are not responsible for unsolicited manuscripts; unaccepted manuscripts will be returned if accompanied by a stamped, self-addressed return envelope. Strategic Vision remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover photograph of US sailors and their families watching a fireworks display over San Diego Bay aboard the aircraft carrier USS Nimitz is courtesy of Matthew Patton.
Editor
Fu-Kuo Liu
Executive Editor
Aaron Jensen
Editor-at-Large
Dean Karalekas
Editorial Board
Chung-young Chang, Fo-kuan U
Richard Hu, NCCU
Ming Lee, NCCU
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Hon-Min Yau, NDU
Ruei-lin Yu, NDU
Li-Chung Yuan, NDU
Osama Kubbar, QAFSSC
Rashed Hamad Al-Nuaimi, QAFSSC
Chang-Ching Tu, NDU
STRATEGIC VISION For Taiwan Security (ISSN 2227-3646) Volume 10, Number 51, December, 2021, published under the auspices of the Center for Security Studies and National Defense University.
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The editors and staff of Strategic Vision would like to wish our readers well this winter season as we bring the year 2021 to a close and prepare to ring in 2022. This past year has been a challenging one for many, just as the Indo-Pacific region remains as dynamic and complex as ever, and we continue our endeavor to keep our readers abreast of developments that impact the region. To that end we offer our latest issue.
We open this issue with Dr. Patrick Mendis and Dr. Antonina Luszczykiewicz, who argue in favor of deeper ties between India and Taiwan, and suggest that stronger ties will benefit America’s strategic goals in the Indo-Pacific. Next, Dr. Tran Thi Duyen, a research fellow with the Institute for Northeast Asian Studies at the Vietnam Academy of Social Science, looks at shortfalls in the rule of law in the South China Sea.
This is followed by an article by Dr. Man-Jung Mignonne Chan, the Chief Strategy Officer for Healthy Asia Inc., who takes a look at vaccine diplomacy and cooperation in the Indo-Pacific Region.
Next, Dr. Tobias Burgers, a professor at Keio University in Japan, argues that Taiwan can leverage its semiconductor industry to deepen relations with the US and Japan. Finally, Dr. Shao-Cheng Sun, a professor at the Citadel in South Carolina, examines China’s rising military threat to Taiwan.
We hope you enjoy this issue, and look forward to bringing you the finest analysis and reporting on the issues of importance to security in the Taiwan Strait and the Asia-Pacific region.
Dr. Fu-Kuo Liu Editor Strategic VisionArticles in this periodical do not necessarily represent the views of either the TCSS, NDU, or the editors
Patrick Mendis &
Although US President Joe Biden’s White House has openly stated it would not support Taiwan independence, the first year of Biden’s presidency has seen a significant tightening of US-Taiwan relations. Since the unprecedented invitation of Taiwan’s de facto ambassador to Biden’s inauguration in January 2021, the White House under the 46th US president has been intensely developing both political and economic relations with Taiwan—which most recently led to resuming talks on the Trade and Investment Framework Agreement (TIFA).
This US-Taiwan revival was not initiated by
President Biden, however. It was rather his predecessor, President Donald Trump, whose decisions left the new administration with little room to deviate from his aggressively anti-China—and as a consequence, pro-Taiwan—strategy.
Only a few days before President Trump left the White House on 20 January, 2021, his National Security Council declassified the US Strategic Framework for the Indo-Pacific as one of the last maneuvers of Trump’s presidency. In the declassified document, the Trump White House recognized China as the biggest “threat” and a strategic “com-
Dr. Patrick Mendis is a former American diplomat, a professor in the NATO and the Indo-Pacific Commands of the US Department of Defense, and a distinguished visiting professor at National Chengchi University.petitor” to American interests in the newly-defined “Indo-Pacific” region, which combined the Indian and the Pacific Oceans’ military commands of the Pentagon. The document advocated for the defense of the so-called first island chain, among which priority was given to Taiwan. It likewise promoted strengthening US alliances with “like-minded” democratic countries—with the main focus on India.
Although the declassification was a sensation among policymakers and scholars, it was of considerably little importance in comparison with the stream of laws that the US Congress has enacted over the last few years to counterbalance Beijing’s aggressive behavior towards India, Taiwan, and other countries in the Indo-Pacific. These laws make it even more difficult for the Biden White House to diverge from the policies of the Trump administration. Moreover, the challenge for Biden’s national security team is to balance current US laws with the emerging geopolitical dynamics of Taiwan’s New Southbound Policy (NSP) as well as the Act East Policy (AEP) of India in Southeast and South Asia.
The Trump administration has championed the big-
gest revival of US-Taiwan relations since Washington acknowledged Beijing as the official representative of China in 1979. In accordance with the One China policy, Washington severed formal diplomatic relations with Taipei; however, the Taiwan Relations Act of 1979 guaranteed Taiwan’s de facto independence. The original act provides an ambiguous framework for “the policy of the United States to preserve and promote extensive, close, and friendly commercial, cultural, and other relations between the people of the United States and the people on Taiwan.”
The very basis of this bilateral relationship originated from the “Memorandum on Formosa,” a top secret—and now-declassified—cable message transmitted to Washington in 1950 by General Douglas MacArthur, then the supreme commander of allied forces in Japan. The American commander argued that Taiwan should be an “unsinkable aircraft carrier” for the United States to project American power and to preserve American national interests in the
Pacific. Thus, China’s historical apprehension with the United States has been a part of the enduring deep consciousness of Beijing leadership. In a declassified secret memo by the CIA titled “Deng Xiaoping’s Discussion of Taiwan with the President [Ronald Reagan],” for example, the Chinese leader reverted to MacArthur’s term to express his “unease with US foreign policy” in April 1984. Undoubtedly, the undercurrent of General MacArthur’s rationale has been the driving force of mutual anxiety in Beijing and Washington.
In October 2020, the Trump White House declassified the diplomatic cable behind the Six Assurances given to Taiwan by President Ronald Reagan in 1982. It has still been part of the foundational elements of American policy towards Taiwan and China. This loosely-kept secret of the Six Assurances outlined a set of foreign policy principles which confirmed America’s unwavering support and US arms sales
to Taiwan. Though originally declared as informal rules, the content of the secret cable was later adopted by the US Congress in a non-binding resolution in 2016 as the cornerstone of the bilateral relationship. It was a precursor to President Trump’s decision to sell arms to Taiwan.
With the revival of US-Taiwan relations under the Trump administration, the overall American legal framework of Taiwan is now guided by a number of key pieces of legislation: the Taiwan Travel Act (TTA) of 2018, the TAIPEI Act of 2019, and the Taiwan Assurance Act of 2020. All these Congressional acts maneuver ingeniously around constraints related to Taiwan’s status by not outright stating support for Taiwan independence, but by strengthening the island’s international position. For example, the TTA of 2018 encourages “visits between officials from the United States and Taiwan at all levels.” It was demonstrated by the increasing number of President Trump’s cabinet officials visiting Taipei in 2019 and 2020.
Enhancement Initiative (TAIPEI) Act involves the United States in enhancing “economic, security, and diplomatic engagement” with countries that have “strengthened, enhanced or upgraded relations with Taiwan” while also punitively reducing American engagement with countries whose actions “undermine Taiwan.” The act also advocates for Taiwan’s membership in international organizations and for its observer status in international bodies—like the World Health Organization—where formal recognition is a prerequisite. The legislation further recommends signing a US-Taiwan free trade agreement.
Finally, the Taiwan Assurance Act expresses support for Taiwan’s defense strategy of asymmetric warfare and encourages Taipei to increase its defense expenditures. Moreover, it reaffirms American support for Taiwan’s participation in the United Nations and affiliated organizations that do not require statehood for involvement.
Although many of these laws, bilateral agreements, and assurances appear to form a mutually beneficial relationship, American military and political engagement with Taiwan is in fact a game of pawns similar to General MacArthur’s vision of the unsinkable aircraft carrier that can maintain US primacy in the Pacific and counterbalance the geopolitical ambitions of Beijing.
Even though the declassified document—together with the Congressional legislations—strengthens US commitment to Taiwan while giving India a “leading role in maintaining Indian Ocean security,” the prospects of Taiwan-India relations are largely muted in Washington, despite the fact that thriving IndiaTaiwan relations would clearly benefit American foreign policy and national security interests. As a result, Biden’s White House should not only independently support the AEP and the NSP, but also make it possible for India and Taiwan to overlap their geopolitical and economic strategies.
The launch of the Look East Policy in 1991 marked
a strategic change in how India perceived itself in the post-Cold War reality. After over four decades of trade protection and state intervention, India finally liberalized its economy, opening up for private and foreign investments, and strengthened political, military, and cultural ties with Southeast Asian countries. Having done so, New Delhi went out of
its traditional, geographically determined spheres of influence, and aspired to the title of not just regional, but continental power.
A great boost was given by Hindu nationalist leader Narendra Modi who elevated the Look East Policy to a completely new level by transforming it into the AEP in 2014—the very same year he became India’s prime minister. As this rapid and clearly prioritized name change suggests, India was expected to push for deeper and more active involvement in Southeast Asia. Moreover, originally an economic plan, the Look East Policy expanded both geographically to countries like South Korea and Japan as well as dimensionally to political and security domains.
Similar to Modi’s transformation of the Look East Policy into the Act East Policy, President Tsai Ing-wen put her stamp on Taiwan’s foreign policy in 2016 by introducing the NSP. Just as Modi added totally new dimensions to India’s Look East Policy, Tsai elevated the existing Southbound Policy to a higher level, focusing on boosting economic cooperation with the Association of Southeast Asian Nations (ASEAN), South Asian countries, as well as Australia and New Zealand, and called for intensifying people-to-people exchanges in tourism and education.
With the growing engagement of the United States
“WiththeongoingSino-American Tech Cold War, the technological nexus between India and Taiwan may present opportunities for greatercollaboration.”
in the Indo-Pacific, which counterbalances China by giving American allies more space to emerge from under the Chinese shadow, India might now wish to pursue a more open and assertive framework to collaborate with Taiwan. There seems to be a similar potential on the Taiwan side as President Tsai rejected the “1992 Consensus” framework in 2019, according to which both China and Taiwan would agree on the existence of only “One China” in order to proceed with talks, though each party has a different interpretations of what that means. By setting a collision course with Beijing, Taipei might now wish to give an unprecedented boost to its relations with New Delhi.
Public opinion in both Taiwan and India seems to support the idea of developing Taiwan-India relations. In 2020, netizens of both countries, as well as of Thailand and Hong Kong, united in their anti-China sentiments under the Milk Tea Alliance, a social movement whose supporters called for strengthening democratic values and restraining the growing influence of Beijing. The Chinese Embassy’s note sent out to Indian media, which instructed Indian journalists not to cover the news on Taiwan’s National Day, enraged Indian public opinion, and mobilized social media users in both India and Taiwan to share
posts and memes about India-Taiwan friendship.
In May 2021, the government of Taiwan rushed to help India—badly hit by the pandemic—by sending 150 oxygen concentrators and 500 oxygen cylinders. Even though these numbers seem small on the Indian scale, it was a meaningful and highly visible gesture, given that these two countries have not had official diplomatic relations since 1950.
Even though it is hard to expect New Delhi to change its stance on the One China policy, the ongoing border dispute with its northern neighbor—which culminated in June 2020 in a deadly skirmish in the Galwan River Valley—is pushing India closer to the United States and its allies in the Indo-Pacific, which include Taiwan. It might be the right time for the Indian government to ask itself whether its firm adherence to the One China policy over the last 70 years has been beneficial enough to neglect a 23-million, prosperous, and de facto independent island nation. However, a real boost to Taiwan-India relations would be the development of joint projects and initiatives regardless of shared anti-China sentiment. With
its economy hit badly by the covid-19 pandemic, New Delhi might now finally step out of the One China Policy shadow and welcome Taiwanese trade and investment to gain momentum for constructing innovative industrial parks in Bangalore, India’s Silicon Valley in Karnataka.
With the ongoing Sino-American Tech Cold War, the technological nexus between India and Taiwan may present opportunities for greater collaboration and American support to restructure the global supply-chains away from China. Since Taiwan’s GDP growth surpassed China’s in 2020, placing Taiwan in the elite group of countries whose economy expanded during the pandemic, it is clear that the United States should support Taiwan in trade and foreign investment—for its own economic benefit and security interests.
Ironically, the great Taiwan-India boost would be the first encounter between Taiwan and India that might truly unleash the great potential of their bilateral relations which so far has been highly untapped and unrecognized by the United States. As the Biden White House intends to continue the Trump administration’s policies on Taiwan and India, the marriage between the NSP and the AEP—not just geographi-
cally but also in the realms of political, economic, and ideological persuasion—might help this antiauthoritarian alliance in Asia grow stronger. If the United States wants to regain the upper hand in the Indo-Pacific, it needs to pursue its objectives not only in the military and economic domains but also by investing in the field of international educational exchanges as part of supporting alliances—including alliances between the like-minded democratic countries in Asia, particularly Taiwan and India.
Both governments now recognize the United States as a broker with the power to facilitate their broader foreign policy objectives in Southeast Asia against China within Washington’s Indo-Pacific strategy under the Biden White House. With all the agreements and projects—together with Washington’s open support for India’s AEP and Taiwan’s NSP—the trilateral relations make the development of Taiwan-India cooperation possible to an extent never seen before. Flourishing Taiwan-India relations might then become a surprisingly positive and successful byproduct of the Sino-American rivalry if Taipei and New Delhi can step out of the shadow of the One China Policy and reinvigorate the over 70-year-old petrification of bilateral relations. n
Strategic Vision vol. 10, no. 51 (December, 2021)
Tran Thi Duyen
Although the United Nations Convention on the Law of the Sea (UNCLOS) was signed in 1982, the UN Security Council has also adopted many resolutions on various areas related to maritime security and transnational crime. The security situation at sea, however, still faces many challenges, containing many unstable factors including territorial disputes and unilateral acts by states violating international law at sea—even coercion of one state by another through the threat or use of force, which affects peace, security, safety, freedom of navigation, and commerce. Preserving and enhancing maritime security is the responsibility of the entire international community.
At a high-level open debate of the United Nations Security Council (UNSC) hosted by India on August 9 called “Enhancing maritime security: A case for international cooperation,” Indian Prime Minister Narendra Modi highlighted five issues of concern:
(1) removing barriers to maritime trade, (2) resolving disputes peacefully by following international law, (3) countries working together to tackle threats emanating from non-state entities and natural disasters, (4) conserving the environment and marine resources, and highlighting pollution caused by plastic waste and oil spills, and (5) having connectivity and the need for a structure that promotes commerce at sea as well as building up global rules and stan-
Dr. Tran Thi Duyen is currently a research fellow with the Institute for Northeast Asian Studies, Vietnam Academy of Social Science. She can be reached for comment at duyen@inas.gov.vn
dards. According to a statement issued by the Indian Ministry of Foreign Affairs, “No country alone can address the diverse aspects of maritime security, it is important to consider this issue holistically in the UNSC. A comprehensive approach to maritime security will protect and support lawful maritime activities to counter traditional and non-traditional threats in the maritime domain.”
Speaking at the aforementioned event, Russian President Vladimir Putin urged countries to establish a structure in the United Nations to deal directly with the problems of transnational crime and prevent the use of the seas and oceans for criminal purposes in different regions around the world. He also vowed that Russia would ensure security in the Atlantic Ocean and the Persian Gulf, where piracyrelated incidents, including robbery on the high seas and the taking of hostages, have become more frequent. While discussing the security situation in the South China Sea (SCS), US Secretary of State Antony Blinken warned the UNSC that any conflict in the SCS—or any ocean, for that matter—would have dire consequences for global security and commerce. “We have witnessed dangerous encounters between vessels at sea and provocative actions aimed at pro-
moting unlawful maritime claims,” Blinken said, adding, “Washington has been concerned about actions to intimidate and bully other countries and unlawfully accessing their maritime resources.” He also added that it was the responsibility of all countries, not just claimants from the islands and waters in the SCS, to uphold the rules they had all agreed upon, and to peacefully resolve disputes when they arise.
As a coastal country with a long coastline of over 3,000 km running from the North to the South, Vietnam is deeply aware of the great value of the sea and the current challenges to maritime security. In Vietnamese Prime Minister Pham Minh Chinh’s speech at the debate, he said that Vietnam had been implementing strategies for sustainable development of the marine economy to sustainably and responsibly exploit marine resources for the nation’s development, as well as improving law enforcement capacity to protect its sovereignty, jurisdiction, and legitimate interests on the sea. He affirmed that the 1982 UNCLOS is a comprehensive and universal constitution on the seas and oceans that governs all activities at sea and is the basis of international cooperation to address common challenges. From that basis, he made three important proposals to ef-
fectively cope with maritime security. First, raising awareness of the whole of humanity about the importance of oceans and seas, and turning such awareness into policies and actions in countries around the world. Second, the security of the seas and oceans is a global issue, so there must be global solutions, connecting initiatives and mechanisms which protect global maritime security with each other, and the United Nations should be responsible for such connections. Only when the mechanisms and initiatives of all countries are connected into a common system can global security challenges be solved effectively.
Third, upholding the spirit of respecting the law. The policies, regulations, and conduct of countries at sea must be in line with international law, especially the UN Charter and the 1982 UNCLOS. They must respect the sovereignty, legitimate rights, interests, and economic activities of coastal states, settle disputes by peaceful means under international law, respect dip-
lomatic and legal processes, and ensure freedom, safety, and security of navigation and overflight. Current maritime security is challenged by traditional and non-traditional actors. If a state deliberately implements the law of the sea in its own way, these challenges won’t be solved.
The three proposals of the Vietnamese Prime Minister are essential for regional security around the SCS. The international community has long benefited from a rules-based maritime order, and UNCLOS 1982 set out the legal framework for activities at sea. There is still militarization in many seas, however, and sovereignty disputes continue to impede the flow of commerce. The SCS disputes are still a potential source of conflict in the Asia-Pacific region. The SCS is the second-busiest arterial traffic route in the world and is a competitive area for the great powers. China considers the SCS the focus of strategic competition in its Belt and Road Initiative, and Beijing has a plan to establish a Maritime Silk Road to connect the South-eastern coastline of China to the Mediterranean Sea through the South China Sea, the
Indian Ocean, and the Suez Canal. At the same time, to contain China’s maritime ambitions, the United States and some Western countries are trying to implement the Indo-Pacific strategy. Some countries such as the United States, New Zealand, Australia, the United Kingdom, France, and Germany have submitted a diplomatic note to the United Nations to reject China’s claims in the SCS.
Despite the jostling for influence by the major powers, as a block, the Association of Southeast Asian Nations (ASEAN) is still trying to show a united face and maintain a consistent stance on the SCS issue without choosing sides. Although not all ASEAN countries are claimants in the SCS disputes, ASEAN itself has an interest in resolving tensions among claimant states to ensure peace, stability, security, safety, and freedom of navigation and overflight in the region, as well as seeking to safeguard ASEAN’s political position in the international arena. However, there are still concerns about the sea lines of communication in the SCS due to unilateral and illegal coercive acts by certain states. If the SCS issue is not properly resolved by following international law, it will adversely affect the entire region. Therefore, ASEAN has increasingly showed solidarity and has promoted collective strength to cope with the security challenges in the SCS.
Great efforts have been made by ASEAN countries, including Vietnam, toward resolving the SCS disputes with the participation of all claimants. It will be necessary to have a South China Sea Code of Conduct and agree on sanctions if a party fails to comply to keep the peace. The SCS issue has received increasing attention from the international community, especially over the past five to ten years. The British and German navies have also been present here.
There have been several serious security situations
in the SCS which have affected this vital trade route. Therefore, there should be a common approach to resolving these disputes. China must comply with UNCLOS and take constructive actions. Vietnam has been very proactive in bringing the SCS issue to the discussion at international forums, especially when it took on the role of ASEAN Chair 2020. Vietnam has also made efforts to build consensus among stakeholders, especially among ASEAN countries, and this shows that there is still a constructive option for all countries involved. The SCS is an important strategic maritime route. It is not only the responsibility of countries in the region but also the international community. The 1982 UNCLOS described in great detail exclusive economic zones and the role of a continental shelf, providing a legal framework that all countries need to follow. So far, there have been many disputes that have relied on international law for resolution. India and Bangladesh have also relied on international law to settle maritime disputes, and even India lost some maritime territory after such a dispute. When considering international law as the basis for resolving disputes, all countries involved in that dispute need to comply. International law sets a basic consensus among parties because it considers states as the same, without the preference of a large country over a small country.
In short, respecting international law is paramount to controlling behavior at sea and managing disputes, and ensuring smooth international trade on the oceans. Because the maritime security environment faces serious challenges, there should be more high-level forums for related countries to make commitments toward resolution. Any disregarding of international law can become a trigger for dangerous and uncontrollable conflicts on the oceans. Without a secure maritime space, it is almost impossible to create a livelihood for the more than three billion people around the world whose livelihoods depend on the seas and oceans. n
Strategic Vision vol. 10, no. 51 (December, 2021)
Man-Jung Mignonne Chan
The Asia-Pacific Region is facing an era of challenges. These challenges include the need to maximize the Regional Comprehensive Economic Partnership (RCEP) agreement, US President Joe Biden’s approach to the Indo-Pacific strategy, and the economic slowdown due to the ongoing responses to the COVID-19 epidemic. The vaccine supply chain is also taking a drastic turn, from vaccine nationalism to competing vaccine diplomacy. Most Asian countries are reluctant to take sides amidst increasing Sino-US competition. The prospects for a post-COVID-19 future in Asia will rest on a well-coordinated health policy and economic policy, within and across borders. The intrigu-
ing geopolitics and geoeconomics is evident in the case of desperately needed vaccines and should serve as a catalyst for further collaborative efforts. In the upcoming post-COVID era, US-China collaboration in engaging the Asia-Pacific region would benefit all. Any great power competition should be put in perspective, and conflict resolution conducted in good faith will serve the region well in the years ahead.
The RCEP signed on 15 November 15, 2020 is a significant commitment by the 15 Asian members. Even without India, it will forge continuous economic integration, and will welcome India when ready. RECP is considered a major catalyst for economic recovery in the post-COVID 19 era.
RCEP is significant for a number of reasons. First, it symbolizes the signatories’ commitment to deepening regional integration. The People’s Republic of China (PRC), Japan, and South Korea stand to benefit the most from increased exports. The increase in Chinese exports will account for nearly 50 percent of the total export growth of all RCEP members, and it will help offset the economic blow dealt to China by the administration of former US President Donald Trump by reducing China’s export reliance on the United States. Third, it is a high-standard agreement which aspires to fulfill Global Value Chain guidelines. The Investment chapter applies a negative-list approach and allows a mere 40 percent local content requirement for services, and it will serve as catalyst for domestic regulatory reform.
The supply chain disruption that followed the COVID-19 responses presents unprecedented challenges. Whereas countries with closed-border policies will face a slower recovery and experience more social discontent, inadequate health policies will fail
to contain the spread of the virus, and thereby stem the devastating casualties. Governments are facing the dilemma of continuous lockdowns, which bring economic downturns, stagnant tax revenues, and the need to subsidize severely hurt sectors. There have been many calls for coordinated health and economic policies, particularly in the area of international cooperation, not only for fair and equitable distribution of medical supplies, equipment, and distribution of vaccines, but also for quicker global economic recovery by gradually lifting restrictions on international travel and trade flows. Closed economies will face a slower recovery and a future of lower incomes. International economic cooperation will be vital to managing the crisis and to supporting recovery through trade, stabilizing markets, faster reopening of business supply chains, and a lowering of investment costs.
In the beginning of the COVID outbreak, there was a sentiment of vaccine nationalism, wherein governments signed agreements with pharmaceutical manufacturers to supply their own populations with vaccines ahead of them becoming available for other countries. Wealthy countries such as Britain,
the United States, Japan, and the European bloc had procured several million doses of the most promising vaccines. At the height of vaccine nationalism, the United States, the European Union, and India initially all placed embargoes or administrative impediments on the export of vaccines and put global access to critical vaccine inputs at risk. In August 2020, Tedros Adhanom Ghebreyesus, director general of the World Health Organization (WHO), stated, “Whilst there is a wish amongst leaders to protect their own people first, the response to this pandemic has to be collective.”
The alternative is a global vaccine program, and this is what the WHO aims to do through COVID-19 Vaccines Global Access (COVAX), a global facility set up in April 2020 to speed up the development of medicines to treat COVID-19, and make them available everywhere. Vaccine nationalism has been gradually reduced with sufficient vaccine manufacturing. Many countries have donated vaccines following China’s spotlighted vaccine donation, also known as “vaccine diplomacy.”
China has so far scored high in vaccine diplomacy, with PRC President Xi Jinping having pledged to pro-
vide Chinese vaccines as a global public good. This stands in contrast to the vaccine nationalism approach still largely employed by America and the European Union. Chinese companies stand ready to make licensing deals for vaccine production in foreign countries. For instance, Sinovac’s CoronaVac has made Indonesia a regional hub via its state pharmaceutical company BioFarma. The United Arab Emirates also built up its native vaccine production capacity by conducting phase III clinical trials for SinoPharm.
The government of Taiwan has criticized the PRC for leveraging vaccine donations to pressure many of the nation’s diplomatic allies—especially those in Latin America, such as Honduras and Paraguay— into switching their allegiance, as Taiwan itself faces a vaccine shortage. Given the incompatible perceptions on their prior established consensus across the Taiwan Strait, Taiwan’s participation in the WHO and Taiwan’s acquisition of vaccines have encountered some hurdles, to say the least. Taiwan has also banned China-manufactured vaccines, blocked vac-
cines from abroad intended to be imported by charity foundations or by local governments in the name of protecting the domestic vaccines. This generated discontent against the central government.
This discontent has eased off slightly since the announcement of a donation of 750,000 vaccine doses from the United States, and 1.24 million from Japan. The PRC had permitted Taiwan to participate in the World Health Assembly (WHA) while Ma Ying-jeou was president of the Republic of China (ROC), but when ROC President Tsai Ing-wen was elected in 2016, Beijing used its influence to put an end to this participation. This put Taiwan on the front lines of global criticism of China on a variety of issues, such as the origin of the COVID-19 virus, Beijing’s initial mishandling if it, and PRC control over the leadership of the WHO. Unfortunately, these criticisms will not resolve the issues. Negotiation in good faith seems more appropriate for dispute resolution in this case.
Instead of disavowing vaccine nationalism at their June 2021 summit, G7 leaders engaged in matching the influence of China and Russia in Asia and Africa. Biden signed onto COVAX, which Trump had earlier rebuked, and is keen to make the best out of multilateralism.
The Quadrilateral Security Dialogue (the Quad), composed of Australia, India, Japan, and the United States, is embedded in the Indo-Pacific strategy. At the Quad summit in March 2021, the United States pledged to produce at least one billion doses for the Indo-Pacific region by 2022. Obviously, this is a move to balance China’s vaccine diplomacy.
The vaccine supply chain in Southeast Asia has encountered major challenges, including capacity shortcomings, insufficient logistics for vaccine acquisition, safe and effective storage, and equal distribution.
Cambodia has been battling an aggressive COVID outbreak. Cambodia’s Prime Minister Hun Sen on May 20 this year, speaking online at Nikkei’s Future of Asia conference, stated, “If I don’t rely on China,
who will I rely on? If I don’t ask China, who am I to ask?” Hun Sen defended his close relationship with China, pointing to Beijing’s substantial financial support. New Zealand’s Minister for Trade and Export Growth also expressed his country’s aim to build on business with its No. 1 partner, China, while reserving the right to address concerns of human rights later, at the appropriate time and place.
Despite the disruptions caused by the US–China trade and technology wars, and the Biden administration’s diplomatic anti-China campaigns around the globe, David Dollar of the Brookings Institution points out that “US trade data shows only a small decline in imports from China (3.6 percent), Americans clearly still want Chinese electronic products, medical equipment and protective gear.” However, China’s direct investment in advanced economies (the United States, the European Union, and Australia among them) is taking a big hit where tightened security screening and investment restrictions cut investment inflows by more than 50 percent between 2016 and 2019. Nevertheless, China remains the top investor in many Asian countries, and is still charting out various alternatives to diversify supply chains. China is maximizing on its legitimate right to elevate its own national development in ways that will work contrary to US expectations. Be it “wolf warrior diplomacy” or “vaccine diplomacy,” leaders in Beijing will no doubt continue to take their own approach to national development. This is taking place even as the Asia-Pacific, and the world, continue to face dramatic challenges from COVID-19, and so the most essential mission will be for them to remain open to forging healthy competitive and collaborative relationships. n
“China remains the top investor in many Asian countries, and is still charting out various alternatives to diversifysupplychains.”
Semiconductor chips are currently among the hottest commodities in demand, save only for COVID-19 vaccines. It quickly becomes apparent why these tiny chips—their sizes measured in nanometers—are essential for producing a wide range of products: from phone screens and computers, cars, civil and military aircraft, hypersonic missiles, to next-generation autonomous cars. Chips are the digital heart of these devices, enabling them to function as needed.
Their importance and scarcity have fueled a global race to research, develop and produce current and next-generation chips. This race, an economic incen-
tive as well as a geopolitical one, is nowhere more visible than in the Asian-Pacific region: Through its Made in China 2025 initiative, the People’s Republic of China (PRC) seeks to become the global leader in developing and producing chips. The Chinese government has made billions of dollars available to fund this development, and something of the wild, at times ineffective, race has pushed the Chinese tech sector to develop next-generation chips. The importance of chips for the PRC is illustrated in the recent decision by Chinese president Xi Jinping to appoint his top economic advisor Liu He as the lead person to develop an effective governance platform to stimulate
development of third-generation chips.
Not to be outdone, and fearing the Chinese efforts to advance its semiconductor chip industry and capabilities, the United States is currently seeking to maintain or regain a leading position in this race by investing significant sums of money in the R&D and production facilities that produce next-generation semiconductor chips. Through initiatives such as the CHIPs act and a separate funding bill of over US$50 billion, the US aims to revive its semiconductors chips research and production capabilities.
Likewise, in Japan, the government is making available funding for the R&D of next-generation chips. It made available close to US$400 million to foster the development of next-generation chips in cooperation with industrial giants such as Canon. However, in both cases, it remains unclear whether these efforts are even close to sufficient to revive either nation’s once-leading chip industry. Tetsuro Higashi, chairman of the government expert commission on
technology, estimates that Japan needs about US$9 billion to make its industry competitive again. The funding made available by the government is, in that regard, a drop in the bucket. While funding efforts are much more significant in the United States, it also remains to be seen how practical these effects will be in America. One of the major hurdles the United States faces in this effort is that its domestic chip industry has gradually declined. Where it once was a global leader, with companies such as IBM producing state-of-the-art chips, these days, the American semiconductor industry is a shadow of its former self. Years of underinvestment, outsourcing, and a shifting economic focus towards the production of other technological products, have left its industry trailing. While efforts by the Trump and Biden administrations indicate a strong support for reviving this industry, it remains to be seen if this can be achieved. Rebuilding the underfunded and under-researched semiconductor chip industry is not simply a matter of making large sums available: It requires research and development, training a workforce, academic research, and constructing facilities that produce
chips. Building semiconductor fabrication plants, also known as fabs or foundries, are multiyear efforts that could easily take half a decade, with construction costs going into the billions of dollars.
What complicates these efforts further is the desire by respective governments (including the American, Japanese, and Chinese governments, and even the European Union) to develop a domestic production process. With governmental actors viewing the semiconductor industry through geopolitical and economic security lenses, they aim to increase national control over the production process. However, the current, highly optimized supply chain of the chip production process is a multi-continent, multinational process, that involves an extensive range of producers, and is tightly interwoven and streamlined. In addition, along several points in this supply chain process, there are highly specialized actors that each have decades of experience in the production or services in a certain part of the production process. For example, while Taiwanese foundries excel at the production of chips, they are reliant on Japan’s
semiconductor industry which holds a near bottleneck position further downstream in the processing of chips made in Taiwan. At the same time, several Dutch companies build the state-of-the-art machines that Taiwanese foundries use to produce these chips. These examples illustrate how interwoven the supply chain is, but equally how certain actors have highly specialized capabilities that are difficult to reproduce.
Forcing geopolitical considerations (such as the decoupling of industries, as is currently being done and will likely increase, given the ever-intensifying geopolitical Sino-American competition) is likely to significantly interrupt and possibly even disrupt the semiconductor industry. In this, the future of the semiconductor industry is one where economic incentives and political considerations are likely to clash. In light of this, it will be interesting to see if the chip competition will be something of a forebearer of the attempts by China, and also the United States, to
seek to decouple their economies. Given how interwoven the chip supply chain is (and the global economy for that matter), it remains to be seen whether this geopolitical drive to decouple and increase selfsufficiency will have any success. Observing how the supply chain of the chip industry functions, and how it has developed over the course of the last three decades, it is unlikely that decoupling efforts could achieve their desired outcome. Rather, it is more likely that geopolitical pressures by nations such as the United States and China (as well as other actors such as Dutch, South Korean and Taiwanese companies) will force them to walk a tightrope between their economic interests and geopolitical pressure, which often clash.
Amid all this stands Taiwan and its world-class semiconductor industry. Globally known for its chipmaking, and home to industry giants such as Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) and United Microelectronics Corp. (UMC), Taiwan holds more than 60 percent of the current market share. Furthermore, and equally important, Taiwan’s companies have the most advanced R&D, knowledge, and production capabilities. Given this expertise, there is now noticeable pressure on Taiwan’s industry actors to collaborate further with the American and Japanese efforts to revive their industries. Nevertheless, it raises the question of how Taiwan and its industry should react to these outreach efforts by the American and Japanese governments and industries.
Geopolitically, the government of Taiwan could utilize its semiconductor industry as a geopolitical tool to further advance its interests with the United States and Japan. Given the recent increasing tensions with China and its ever-increasing aggressive behavior towards the island, it seems logical that Taiwan would seek to align itself closer to these nations and gain more support. In this, the chipmakers could be utilized as a tool for Taiwan to use to its advantage in its geopolitical situation: Its semiconductor exper-
tise could then be used as a trading tool for further political and military support.
While the United States and Japan seem willing to increase their support for Taiwan, we can expect both nations to seek benefits in return. Given Taiwan’s position and the enduring military threat from China, both nations will pressure Taiwan to harden its chip
production supply chain. This translates into ensuring that the production of chips will not remain primarily on the island itself, and hence subject to direct Chinese military threats. This raises the possibility of Taiwan firms outsourcing production facilities and supply chains outside of Taiwan. Plans for the construction of a fab foundry by TSMC in Arizona, and also a TSMC-Sony joint fab venture outside Tokyo, should be considered through this lens. While there is a clear economic incentive for TSMC fabs in Arizona and Tokyo, there is certainly a geopolitical element to these decisions as well.
Nevertheless, these efforts to establish non-Taiwan located fabs could come at an economic and geopolitical price for Taiwan. First, establishing offshore production lines—even if not of the same quality as in Taiwan—runs the risk that Taiwan’s industry will lose something of its forefront position. While it would not necessarily reduce its leading position in the short term, in the long term, it could provide the basis for the US and Japan to build and extend their respective semiconductor businesses at the cost of Taiwan’s industry, and as such, it could decrease the geopolitical power of its chip industry and potentially impact the leverage it holds. While much of the global focus on Taiwan’s semiconductor industry is on TSMC and UMC, and its leading position
“Establishingoffshoreproduction lines runs the risk that Taiwan’s industry will lose something of itsforefrontposition.”
and ability to make the thinnest—and as such, the most advanced—chips, there are numerous smaller producers in Taiwan with less-advanced capabilities that still make up a significant proportion of Taiwan’s semiconductor output. Outsourcing less-advanced capabilities to the United States and Japan would put these companies at economic risk of losing the competition, and as such, profits and foremost employment opportunities for Taiwan’s people. Second, despite China seeking to build its semiconductor industry, it is still heavily reliant on Taiwanese companies to meet its demand for chips. As such, with China consisting of a significant market (and according to recent data, a growing one), Taiwan needs to find a balance between the geopolitical potential it can gain from its industry and the economic considerations. With China representing such a large market, it is not unlikely that Taiwan’s chip companies would go to considerable lengths to keep access to this market. Given recent Chinese behavior towards Taiwan, we can expect that Beijing will react strongly against Taipei seeking closer geopolitical cooperation with Washington and Tokyo. As a result, China could seek
to increase the pressure on Taiwan. Given its dependency on chips, such pressure tactics would not necessarily be in the chip domain but are likely to be found in other domains—from other economic sectors, and in the form of military and diplomatic pressure.
The sum of this illustrates the difficulties for the Taiwanese government and its chip industry in the ongoing tech competition between China and the United States. While the competition could bring geopolitical benefits in the short and possibly long term, it equally creates risks and uncertainties for Taiwan and its chip sector in the geopolitical domain, especially when it comes to the nation’s economic security. Navigating this competition and ensuring that the interests of Taiwan and its industry are maintained and represented will be one of the core tasks of its government in the next few years. Bad policies could lead to navigational errors and could create a situation in which Taiwan and its chip industry could gradually lose importance over the long term, diminishing its economic security and geopolitical value. n
Shao-cheng Sun
Since 2016, relations across the Taiwan Strait have become very dangerous. China’s military threat against Taiwan has intensified. In the first four days of October 2021, China’s air force intruded into Taiwan’s air defense zone more than 150 times in the largest incursions ever seen. Military observers warn that a Chinese invasion seems imminent. In response, the US military presence in the Taiwan Strait has become more visible. Small teams of American troops, including Marines and Army Special Forces, have conducted training sessions in Taiwan with the Republic of China (ROC) military. If there is to be a war between the United States and China, the trigger will likely be Taiwan. This article explores China’s intentions to conquer Taiwan,
the impact of losing Taiwan, and the risk of military conflict between the United States and the People’s Republic of China (PRC).
Achieving what the Chinese call “reunification” with Taiwan would be the biggest feather in PRC President Xi Jinping’s hat. The Chinese government has made it clear that if Taiwan declares independence, it would be an instant trigger for war. After Tsai Ing-wen won the ROC presidency in 2016, she refused to accept the “1992 Consensus,” which was embraced by her predecessor, former President Ma Ying-jeou. If Xi thinks that achieving peaceful unification with Taiwan is not going to happen, he will likely resort to the use of force. To that end, the People’s Liberation Army (PLA) is now ramping up its readiness for an invasion of Taiwan.
The Chinese government claims Taiwan as an inalienable part of its territory. It has brainwashed its citizens into believing that unification with Taiwan is a matter of national pride—a sacred mission to realize the “China Dream.” If Xi walks back from his stated commitment of achieving unification, it would be the end of his legitimacy to ultimate power and control. This is a risk he cannot take.
Taiwan occupies a highly important geostrategic position, located at the center of the first island chain. Most Western strategists learn to view Taiwan as an unsinkable aircraft carrier. If the PLA occupies Taiwan, this will further enhance its power projection capability and allow Beijing to project military power far into the Pacific Ocean. This would greatly restrict the United States and its allies’ capability to navigate freely. It would also pose a grave threat to their national interests and security.
With the recent rise in the intensity of the China threat, Taiwan has experienced a very close relationship with the United States, particularly after President Tsai took office, during whose tenure relations between Washington and Taipei have great-
ly improved. For example, the US Congress passed several legislative acts (Taiwan Travel Act in 2018, TAIPEI Act in 2020, etc.) in support of Taiwan, which committed the US government to helping Taiwan improve its international standing. Presidents Trump and Biden have both dispatched cabinet members and other ranking officials to Taiwan, to strengthen bilateral relations. The visits enraged leaders in Beijing, who view the United States as violating China’s domestic affairs. More importantly, the quantity and quality of US arms sales to Taiwan have increased. Chinese media threatened the United States and warned it to stop supporting Taiwan’s “separatist forces.”
Since World War II, the United States has been the leading power in the Pacific. Today the United States has a significant number of military forces stationed in Japan, South Korea, and Australia. The US military presence is an essential component in maintaining peace and stability in the Asia Pacific region. If the United States failed to defend Taiwan, regional security would be greatly impacted: US allies such as Japan, South Korea, Australia, and the Philippines
might begin to doubt the sincerity of the US security commitments to them. America’s leadership role in the region would be seriously tarnished.
Taiwan has a robust economy and is a global leader in high technology. By the end of 2021, it had the fifth-largest foreign exchange reserves in the world, at US$545 billion. Today, Taiwan dominates the outsourcing of semiconductor manufacturing. For example, Taiwan Semiconductor Manufacturing Company (TSMC) makes more than half of all made-to-order chips globally, and 90 percent of the most advanced processors used in today’s iPhone, supercomputers, and artificial intelligence applications. TSMC is also making chips for US fighter jets, Mars probes, and the highest-end processes. If Taiwan becomes a Chinese province, this would give Beijing control of Taiwan’s economy and its high-tech industry, and would seriously disrupt the supply chain of advanced chips that the United States desperately needs.
The loss of Taiwan to the Chinese Communist Party (CCP) would also be a blow for global democracy, and would only serve to further embolden Xi Jinping’s hardline policies. After Xi consolidated his power, he began to tighten social control in China. First, China has been abusing the human rights of its ethnic mi-
norities, particularly the Uighurs in Xinjiang. More than one million Uighurs are currently imprisoned in so-called re-education camps. Second, the CCP’s involvement in Hong Kong’s political affairs has been controversial and violent. The Party’s control over politics in the former British colony triggered a historic record of student protests and police crackdowns. Third, the Chinese government routinely bans
anything it deems could reflect Western democratic values, including reality TV shows, boy bands, and foreign computer games. Lastly, in a move inviting comparisons to Chairman Mao, studying Xi Jinping
Thought has been made compulsory in China’s primary schools. The educational control of the PRC has become more aggressive. If a democratic Taiwan is forcefully taken over by China, the democratic values in the world that the United States earnestly helped establish will be seriously diminished.
The regional and global balance of power would also
“Despitetheeconomicslowdowndue to the impact of COVID-19, China’s defensebudgetin2021increasedby 6.8percent.”
shift to China if Taiwan falls. By the end of the 1990s, the cross-strait military balance was already beginning to tilt toward China. With annual double-digit increases in military spending, the PLA has acquired innovative weapons in both quality and quantity. At the same time, the PLA has increased its military training and exercises. China now has thousands of ballistic missiles deployed along its coast. Those ballistic missiles are targeting Taiwan. If Taiwan falls into the hands of the Chinese, the balance of power between the two superpowers will greatly lean toward China.
China’s military buildup is aimed at taking over Taiwan and preventing the United States from intervening in a cross-strait conflict. Chinese leaders believe that their biggest obstacle to forcing unification is US intervention. When the United States attacked Iraq in 1991, the PLA intensely studied the US military strategies used in Operation Desert Storm. In any future military campaign against Taiwan, the PLA is preparing to prevent US military intervention. Despite the economic slowdown due to the impact of COVID-19, China’s defense budget in 2021 increased by 6.8 percent. Moreover, China’s military buildup in such fields as cyber, space, information technology, joint operations, precision strike, and nuclear arsenals, are of grave concern to the US military. Facing a rising military threat from China, there are some potential risks between these two superpowers.
In the face of likely intervention from US forces, the PLA is focused on an anti-access/area-denial (A2/AD) strategy. They seek to prevent US forces from using overseas bases, while denying US assets the freedom to maneuver within striking distance of Chinese territory. China is developing some of the world’s most advanced weapons systems, including space-based weapons, laser weaponry, drones, and hypersonic missiles. In 2015, China unveiled the Dong-Feng 26, an intermediate-range ballistic missile that can strike US aircraft carriers as far away as
Guam. China’s increased military buildup has pushed the United States to increase its military response in the Taiwan Strait. Since President Joe Biden took office in 2021, US warships have sailed through the Taiwan Strait monthly.
US-China frictions are increasing, and a new Cold War is looming large in the region. With their heavyhanded assertiveness in the South China Sea, Taiwan, Xinjiang, and Tibet, as well as Hong Kong, Chinese leaders have greatly tarnished China’s image in the world. At the start of COVID-19, the Chinese government attempted to cover up the outbreak. This eventually resulted in a worldwide pandemic. AntiChinese sentiment is on the rise. A new alliance was announced between the US, Australia, and the United Kingdom, to counter China’s assertiveness in the Pacific. Far from backing down, Chinese foreign and security policies have become even more hostile. President Xi Jinping also claimed that “anyone who dares to bully us will have their heads bashed bloody against a Great Wall of steel.”
US resolve against China is also increasing. When asked by CNN anchor Anderson Cooper if the United States would come to Taiwan’s defense in the event of an attack by China, President Biden replied, “Yes, we have a commitment to do that.” A White House spokesperson later walked back the statement, however, clarifying that there had been no change in the US policy toward China. The PRC Foreign Ministry responded that, when it comes to issues related to China’s sovereignty and territorial integrity, there is no room for China to compromise or make concessions. If a war occurs across the Taiwan Strait, US defense of Taiwan is possible, because of the rising anti-Chinese sentiment at home and abroad.
According to some military observers, if the United States intervenes in a cross-strait military conflict to-
day, this might result in an all-out war. Since a war across the Taiwan Strait would be extremely costly, all parties should de-escalate and prevent armed conflict from happening. When written in Chinese, the word “crisis” is composed of two characters. One represents danger, and the other represents opportunity. Now is the time for strategic planners to come up with creative ideas to diminish the crisis.
German political scientist Stefan Wolff’s study on curbing the tension of military conflicts extracts lessons from Northern Ireland, Liberia, and Timor to show that leadership, diplomacy, and institutional design are effective tools in forging peace. Leadership needs to be determined and visionary in its commitment to peace. Diplomacy needs to apply the right mix of incentives and pressures to help them reach an equitable compromise. Institutional design requires innovative thinking and flexible implementation.
If these three tools have worked on war-torn countries, then the ROC government might consider learning these lessons and taking the initiative. First, President Tsai Ing-wen could publicly express her strong desire to build peace across the Taiwan Strait. Based on the
principle of “seeking common ground while reserving differences,” she could propose a summit with Xi Jinping to pursue the solution for peace between Taiwan and China, like the Trump-Kim summit, or the Ma-Xi summit in Singapore. Second, the Taiwan government could request that the United States, or another third party, set up a diplomatic mechanism for dialogue and conflict resolution between Taiwan and China. Other countries in the region could also facilitate a constructive platform to make sure that Taiwan and China can find ways to live with each other.
Third, the governments of the ROC and the PRC have set up the Mainland Affairs Council and the Taiwan Affairs Office of the State Council, respectively, for handling cross-strait issues. These two organizations should come up with creative ideas and flexible policies for implementation. Taiwan could suggest a “no independence” proposal and seek crossstrait confidence-building measures in exchange for a PRC promise to forsake the use of force. As stated by Stefan Wolff, the process of dealing with conflict is full of setbacks. It might take a generation to accomplish, but it requires today’s leaders to take responsibility and to learn the right lessons. Taiwan and China need to be prepared to return to the negotiating table if the agreement stalls. n
