Taiwan’s international profile rose significantly in 2021, as shown by a sensationalist cover page from The Economist labelling it ‘the most dangerous place on earth’ due to increasing Chinese pressure. The tilting of the cross-Strait balance in Beijing’s favour led to reassessments of when China could invade Taiwan and whether the United States and its allies could credibly deter it from doing so.
The People’s Liberation Army’s 150-warplane intrusion into Taiwan’s air defence identification zone in October signalled a willingness to use force to impose sovereignty over the Taiwan Strait. This display followed a period of near-daily intrusions that also included regular naval exercises in waters close to Taiwan involving live-fire, amphibious assault and anti-access/area-denial activities. These efforts were accompanied by disinformation campaigns, political meddling and economic sanctions — including China banning Taiwan-ese ‘freedom pineapples’ after citing biosecurity concerns. And in December, it was revealed that even Taiwanese President Tsai Ing-wen’s security detail had been compromised by Chinese espionage.
China also continued its charm offensive on Taiwan’s diplomatic partners, flipping Nicaragua and reaffirming warnings that Beijing’s pressure to cut off Taipei’s remaining allies in Latin America could increase China’s influence in a region historically dominated by the United States.
This dynamic was displayed in Guyana earlier in the year when a new Taiwanese representative office lasted only 24 hours. The United States seemingly pressured Guyana to open the office to balance against China’s influence, but Beijing successfully convinced Georgetown to scrap the plan almost immediately. Instability caused by changed diplomatic recognition was also felt in the Solomon Islands, where violent riots broke out in November over the formalisation of ties with China over Taiwan two years ago.
Undeterred, Taipei continued to promote its liberal and open market credentials in continued international isolation and in the face of interference from Beijing. Tsai maintained that Taiwan remains committed to the status quo and that it would not weaken its ‘persistent embrace of democracy’. And likeminded countries began to publicly display their support.
EU lawmakers visited Taiwan in a first-ever official visit to learn about Taiwan’s efforts to strengthen its electoral processes and counter foreign interference. Lithuania persisted with its commitment to a de facto Taiwanese embassy despite this triggering Chinese sanctions. Japan also continued its backing of Taiwan, with its foreign ministry appointing a Taiwan ‘planning official’ from 2022 who will be responsible for Taiwan and the Senkaku/Diaoyu islands. Australia, the United Kingdom and France also showed solidarity, while the United States invited Taiwan to its Summit for Democracy, doubled its military presence on the island and approved a US$750 million arms sale. But Taiwan will have to weigh the impact of its heightened status in US–China strategic competition on its domestic politics. For instance, while Taiwan was globally hailed as a success at pandemic management, this was not felt locally due to relaxed quarantine measures, testing complacency and a slow vaccine rollout. And a December referendum on banning pork imports containing the additive ractopamine on safety grounds was defeated. Yet the outcome was not based on public health concerns, but fears it could create another obstacle for Taiwan to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and block a free trade deal with the United States (which uses ractopamine). This dilemma will impact Taiwan’s dominant role in the supply of the world’s advanced semi-conductors and perversely influence domestic policies. Taiwan’s worst drought in 50 years led to water-rationing of homes and farmlands despite a stable water supply being ensured for semi-conductor manufacturing.
Two island-wide power outages within five days created rolling blackouts to households but only a minor dip in supply to the Taiwan Semiconductor Manufacturing Company (TSMC) and no impact on other firms. A referendum on the relocation of a liquid natural gas power station stressed not environmental concerns, but the dilemma of whether Taipei could achieve net-zero emissions by 2050 while doubling the power supply to new fou-ndries that could produce next-generation two-nano-metre chips. Despite these challenges, Taipei will need to protect its near-monopoly on this critical technology. It might deter China from a military attack, and motivate the United States and its partners to guarantee Taiwan’s independence. Concerns about ensuring supply chain resilience due to the pandemic and to ensure economic security led to the courting of TSMC to establish foundr-ies in the United States, Japan and possibly Germa-ny. But success in reducing supply chain vulnerability in these ways could have the unintended consequen-ce of reducing Taiwan’s geopolitical significance.
Taiwan’s political parties will find it hard to establish bipartisan agreements that balance domestic socio-economic interests and Taiwan’s rising role in US–China competition. Whatever the outcome for Taiwan’s 2022 mayoral elections and 2024 presidential elections, any future administration will face difficult trade-offs.