CHAPTER 2

RRl

Previous research about the cross-strait relationship between China and Taiwan has sought to examine
the economic and political impact on both countries.2 However, the existing literature has yet to
sufficiently analyze how the national identity of the people in Taiwan has been shaped by this
antagonistic relationship. Taiwan’s national identity is difficult to measure. Even though researchers
have tried to explicate Taiwanese’ voting behavior using their national identity, it seems like there is
noticeable fluidity in self-identity.3 Besides surveys, primary research materials, demography, analysis of
content, analysis of discourses

The risks for war with China and Taiwan have sharply increased in recent weeks – although the potential
for violence in the region has been on an upward trajectory for several years. This exposure can be
quantified by the Global Specialty Insights Center’s proprietary Country War risk models that provide
peril-based scores for numerous countries. Specifically, the Global Specialty Insights Center’s “War on
Land” scores for China and Taiwan are both 8.0 – indicating an elevated risk for war. The scores are on a
scale of 1.0 to 10.0, with 10.0 being the highest risk.

The following white paper will support a quantitative output with a qualitative understanding of risk in
the region, specifically analyzing the history and current state of affairs with respect to China-Taiwan. In
addition, this article will discuss the rising risks with China forcing unification with Taiwan, how China
would integrate, and also provide implications for risk and other China-related war, inter-state conflict
and violence scenarios.

Overall, war risks are indeed elevated. This does not mean that war could occur in the very immediate
future. However, events, policies and politics in the region all raise the potential for war. While a conflict
could be averted, the risks of mistakes and missteps remain high. Put simply, a war between China and
Taiwan is not a foregone conclusion or inevitable. However, if we think about where war and inter-state
conflict could occur, the risks are significantly higher in and around China and Taiwan.

China-Taiwan: A History of Tensions

After formalizing ties with Mainland China, the U.S. maintains an ambiguous posture towards Taipei as
Beijing seeks to reunify Taiwan with China.
The Chinese Civil War which started in 1927 was fought between the Kuomintang (KMT) government of
the Republic of China and the Chinese Communist Party (CCP). At the conclusion of the war in 1949, the
People’s Republic of China (PRC) was established under the leadership of the CCP, and the Nationalist
Party (Kuomintang) fled to the island of Taiwan.

In the years after, even though mainland China considered Taiwan its own, the U.S. recognized Taiwan
as the legitimate sole government of all of China. However, U.S. President Richard Nixon’s visit to Beijing
in 1972 induced closer relations with (mainland) China – an approach continued under President Jimmy
Carter, who formalized relations with (mainland) China alongside acceptance of the “One China Policy.”

The “One China Policy” recognized that the PRC (i.e., Beijing), is the official government of China and not
the Republic of China (i.e., Taipei/Taiwan). At the same time, the U.S. approved the Taiwan Relations Act
of 1979, which helped define U.S. ties with Taiwan, including provisions to provide Taipei with the
means of defending itself. In other words, even though the U.S. established formal diplomatic relations
with Beijing at the expense of Taipei, U.S. policy also sought to ensure that Taiwan would not be taken
over by China.

These events gave rise to the concept of “strategic ambiguity,” which was the U.S. policy of not telling
the world how it would react in the event of a China-Taiwan War. The Taiwan Relations Act was
intentionally unclear as to whether the U.S. military would become involved in a conflict. The U.S. policy
purposefully leaves the option open in whether the country would formally defend Taiwan. The goal
was to prevent an invasion of Taiwan and overall hostilities in the Taiwan Strait, which is the body of
water separating China from Taiwan.

As China’s economy and military expands, its ability to force unification between Taiwan and the
Mainland grows, too.

For several years, strategic ambiguity worked. Nixon’s opening to China eventually led to Beijing’s
acceptance into the World Trade Organization (WTO) as well as the overall global financial architecture.
As a result, China was the recipient of significant foreign direct investment, which boosted its
manufacturing capabilities and integrated it into global trade. This helped China to grow and become
the one of the largest economies in the world, only second to the U.S. Per the IMF, China’s GDP stands
at nearly $20 trillion compared to America’s $25 trillion and Taiwan’s $841 billion. Furthermore, China
accounts for almost 15% of all global trade.
Beijing also utilized much of this wealth to bolster its defense spending and domestic weapons
development capabilities. For example, according to the Stockholm International Peace Research
Institute (SIPRI), China spends about $250 billion on defense, the U.S. is around $780 billion and India
spends almost $75 billion.

Some would argue that China’s strategy of economic growth was closely tied to its long-term strategic
objectives. This would include an eventual military-led takeover of Taiwan and ultimately succeeding in
becoming a global hegemon to challenge the U.S.-led economic and strategic order. And while China-
Taiwan tensions would rise and fall, they were generally contained for several years as China grew. Yet,
that may be set to change.

Context for Current China-Taiwan Standoff

House Speaker Nancy Pelosi’s visit came after a long line of events and policies seen by Beijing as a
change in U.S. posture.

While U.S. congressional delegations have visited Taiwan in the past, U.S. presidents and members of
the cabinet have not, per recognition of the One China Policy. Pelosi’s recent visit meant she was the
most senior visitor since then-House Speaker Newt Gingrich visited in 1997.

China most likely presumed that Pelosi’s visit was part of a broader strategy by the U.S. to end the One
China Policy and nudge Taiwan to formally declare independence. This is a red line for Beijing. It’s
possible that China has this mentality because of these seven events that happened before Pelosi’s

REFERENCE

www.cfr.org
https://www.thehartford>china

https://carnegineendownment .org.

https:// www.bbb.com. news.