The Crisis in the Taiwan Strait

For some months now the atmosphere over the stretch of sea that separates China from Taiwan has become very heated, but this has become more intense in recent weeks. China continues to fly planes in Taiwanese airspace, meanwhile it is relentlessly building military infrastructure in the area facing the island. Last March, Admiral Davidson, outgoing head of the American command for the Indo-Pacific, declared that war with China could occur over the next six years, and therefore asked for a strengthening of the available economic budget. His successor John Aquilino repeated the same warning in different words.(1)

Japan fears Chinese ambitions over the Senkaku Islands, which are rich in gas and oil, so has declared in no uncertain terms through Prime Minister Taro Aso(2), that if China invades Taiwan, Japan will side with the United States to defend the island, and has increased Japan’s military budget. After all, the Okinawa archipelago is very close to Taiwan and it “hosts” 24 US bases.

Both sides continue to carry out naval exercises, manoeuvres or simple passages through the strait which, despite being a 180 km wide stretch of sea, is increasingly and literally “narrowing”, a symbol of how restricted the margins of mediation between the contenders are.

Taiwan is a small island, just over a tenth of the size of Italy, with 23 million inhabitants, a dynamic economy like all those that were once defined as the "Asian tigers”. It is currently only recognised internationally by 14 countries, and since 1971 no longer has a seat at the UN, after Beijing took over as the representative of all of China. Other states only have trade missions on its territory, because if any important country opened an embassy, ​​China would immediately respond with the most brutal economic retaliation. On the other hand, it has a place in the WTO and in some international economic organisations. Since 1979 even the United States no longer officially recognises it, having accepted the principle of “one China” from the time when its a priority was to irreversibly divide China from Russia. Since then they have always followed the principle of so-called “strategic ambiguity”, that is, not legally recognising Taiwan, but only de facto, by helping it to arm itself.

What does Taiwan mean today? Two things above all: in the first place it is in a strategic position for control of the seas through which most commerce between the South China Sea, the East China Sea and the Pacific passes. It is an interchange between Japan and South Korea, the Philippines and Australia, China, Vietnam and Indonesia: as a nerve centre of all this, Taiwan is notable for its incessant trade in goods, semi-finished products, raw materials, hydrocarbons, a substantial part of world trade.

The other aspect that makes Taiwan valuable is that it is one of the world's leading producers of microchips, electronic circuits that are now used in all industrial sectors, from household appliances to weapon systems; the recent crisis of excess demand for them as a result of the post-pandemic recovery has affected car production, has demonstrated how key this sector has become for any product with a high technological content. In short, some of the global chains in the production of goods and surplus value pass through Taiwan and breaking ties on either side of the Taiwan Strait would not be painless for anyone.

The second question we should ask ourselves then, is why China should unleash a conflict with unpredictable consequences for an island with which it already has very close commercial relations?

This would be inexplicable if the capitalist system were not in a state of crisis, obvious even in a young and rampant Chinese capital which, in order to get out of the contradictions of this crisis, has been willing to raise the stakes more and more. Taiwan and China have been separate for over seventy years and this has benefited both. If the relationship has become a problem now, “the struggle for democracy” or for “the rights of peoples” have nothing to do with it, even if these are the arguments that will be provided on either side. Instead, it is the struggle for survival of the national capital which is at issue, where the strongest will be able to dictate the new rules to suit its interests: a paradox in a certain sense for a globalising and revolutionary class like the bourgeoisie. It is revolutionary, in the sense that it is forced to continually revolutionise the productive forces and existing social relations, but it is deeply anchored in the present power structure whose ultimate expressions is the national State.

The point of view of the Chinese ruling class

Since his reappointment at the top of the CCP in 2017 Xi Jinping, under the guise of fighting corruption, has eliminated most of his political opponents (others had also done so before him). He has promoted himself as the father of the homeland, as the new Mao Zedong, but to do this he has had to focus on national pride, on patriotic unity in exchange for the promise to revive the Chinese nation and consolidate its place in the world.(3) All this necessarily involves reunification with Taiwan. He has publicly sworn to obtain it within the middle of the century even if it is certain that in reality he aims to obtain it sooner, that is, within his mandate, which, other than personal ones, knows no limits.(4)

Much will probably depend on the dynamics of the economic crisis, that is, whether it will accelerate in the short term, or not, with the growth of interest rates, which would be unsustainable for a world economy as indebted as ever. Or perhaps it may even depend on the choices of the US leadership which might be tempted to pre-empt its antagonist before it can close the military gap.

Much could ultimately depend on the trajectory of a single unpredictable spark, even if, it has to be said, so far the Chinese leaders have shown that they do not want to leave anything to chance. What is certain is that the conditions for the outbreak of a fire are already being set now in a huge arms race, and in a sequence of increasingly aggressive stances by the two contenders. For several years, the real antagonists have been operating in disguise behind the small or not-so-small conflicts in Africa and the Middle East. We now have a China-Russia-Iran bloc on the one hand, and the United States and its allies on the other. The same will probably continue to happen along the potential or already operational development lines of the Belt and Road Initiative, the vast Chinese project to form an infrastructure network that allows its trade surplus to be directed more efficiently towards the entire Eurasian continent to underscore its economic and financial supremacy.

The point of view of the US ruling class

For its part, the US wants to contain Chinese expansionism within what is defined as "the circle of the first islands", that is, to prevent Beijing from becoming in effect not only the economic superpower that it is already in fact, but also a political and military superpower in the area. If that happened, it would broadly mean the beginning of the end of their history as the “world’s leading country”.

While the conquest of the island actually means much more to Beijing than it immediately means to Washington, many of the countries in the area that are now lining up against Chinese initiatives, fearing their effects, and would soon be forced to come to a de facto agreement with the new “dominus”. Over time the dollar could lose its current hegemony as a reference currency and consequently the revenue it derives from it internationally, a hegemony that is already under attack on a financial level, in particular by China.(5) Creditors would no longer be satisfied with its bonds and the emperor would be seen without clothes. Already the feeble flight of the US military from Afghanistan has been used by pro-Chinese propaganda to highlight the increasingly obvious cracks in the US system of military control over strategic areas, and it has probably made more than one ally shudder, because that is what could happen in the end if the US takes another step back in the Eastern seas.

A possible Chinese occupation of Taiwan would be very difficult for the US to combat on a military level, but it would probably mark the transition from the current "cold war" to open or semi-open conflict, with the consequent realignment of all those countries that for now try to keep themselves in a position of relative equidistance from the two fronts.

The paradoxical aspect, if we might say so, is that all of this has accelerated especially since Barack Obama, that is, by one who has been described as the most democratic and presentable of American presidents in recent years – albeit only more presentable in comparison with the last 5 or 6 US presidents, so that’s not saying much. With its “Pivot to Asia” the United States has begun to transform local disputes, in particular national claims on the various islets lost in the sea that separates the large countries of the area, into frontal opposition within a wider context. It was Obama who began to weave the web of the free trade area known as the Trans Pacific Partnership (TPP) from which Trump then withdrew the United States because he feared growing trade deficits; with the result of pushing China, initially deliberately excluded from the TPP, to ask to join. The agreement was signed in 2018 by the governments of Canada, Chile, Australia, Brunei, Japan, Malaysia, Mexico, New Zealand, Singapore, Peru and Vietnam, and recently Great Britain, and China. Paradoxically Taiwan has applied for entry, much to Beijing's irritation of course.

The viewpoint of Taipei

So much for the two countries that dominate the region. Let's now try to look at things from Taiwan's point of view. From the cultural point of view, the "one country, two systems" formula obviously does not appeal to the Taiwanese who have seen it applied to Hong Kong. The Hong Kong "normalisation" process was a sensational own goal on a political level, because it greatly favoured the anti-Chinese currents, in a population which, like that in Taiwan, has always tended to be agnostic with respect to relations with the mainland. Indeed until very recently even the political heirs of the ruling Kuomintang had openly sided with a rapprochement.

The fact is that the island is obviously in close economic but also cultural and linguistic relations with “the motherland”. In the last thirty years, however, Western investments have favoured productive specialisation. The US technology giants in particular have realised that it was more profitable to limit themselves to the design of electronic circuits, transistors and microchips and entrust their production to local players, in particular to the TSMC (Taiwan Semiconductor Manufacturing Company) which alone produces between 40 % and 50% of global output. Meanwhile, the skills of local engineers and technicians have also developed, and to date only South Korean companies, in particular Samsung, can compete with Taiwanese companies on the most advanced technology products, which are those in which the miniaturisation of circuits exploiting the properties of semiconductor materials, has reached impressive levels. Of course, all of Samsung's competitors, from Apple to Microsoft to European smartphone brands, rely on Taiwanese manufacturers.

China, which also leads the market in the processing of rare earths for electronics, is trying to concentrate investments in this sector, but has not yet managed to close the technological gap, and is far from productive self-sufficiency. Huawei was hit at the request of the Americans by the suspension of some supplies, and TSMC has committed to building a new plant in Arizona, but in fact the company also has plants in China. It would prefer not to have to choose between one of the two contending camps, as it has lucrative business with both.

The Taipei government, meanwhile, has proposed to increase its military budget for 2022 by $17 billion. Knowing it could never compete militarily with China, its idea is to make itself the bitterest possible morsel to chew, according to the theory that is known as the "porcupine". In other words it intends to wage an asymmetrical war that makes invasion costly and control complicated, pending US rescue. To this end, Taipei is trying to equip itself with all those military technologies capable of sabotaging a possible invasion: anti-landing systems, short-range missiles, anti-ship mines and so on.

The outcome is difficult to predict: we must not forget that this is an era in which wars can be fought just by paralysing the opponent's defences through attacks on its information and communication systems. Today, in theory, it is possible to block an airport, a power plant, a transport or communications system even without bombing it, and in this China has already shown itself to be at the forefront with demonstrations of force both towards Taiwan and, recently, Australia.

The point of view of Brussels

The political line of the European Union in the Indo-Pacific, although previously unclear, was about to be presented with great fanfare at a summit, last September, just when the Anglo-Saxon countries revealed to the world the birth of the AUKUS alliance, between the United States, Great Britain and Australia. The breaking of the economic and strategic agreements between Australia and France, with the latter considering itself, rightly or wrongly, a leading country in the area, having about two million citizens and a military presence in the area, although not comparable to that of the United States, showed just how fast the crisis is unfolding. The agreements, as we know, provided for the supply of conventional submarines but were set aside in favour of a contract with the US Navy for the construction of nuclear submarines. They are faster than diesel ones, capable of greater autonomy in the open sea without the need for supplies, more difficult to detect and often armed with nuclear warheads.

France, as we said, would like to play a leading role and aims to divide Russia from China, while Angela Merkel's CDU line has always been more oriented towards a pragmatic low profile towards Beijing in order not to compromise its rich interests in their mutual trade. Something might now be changing as both the Merkel era is over and because the United States no longer tolerates European strategic ambiguity; they want decisive and reliable allies, to whom they are no longer in a position to offer discounts and favouritism.

Therefore, as always, the European line is the result of a low-profile compromise between different positions and interests, primarily French and German, to which the Dutch initiative on the issue can be added. The declared intention is to create a European emergency response force within a few years. It is to be partially autonomous, but not in opposition to NATO, on the other hand it is to preserve a multilateral order in the area by defending European interests and "values" (it is difficult to distinguish between the two even semantically). The first urgent task is to reduce the dependence of European industry on Taiwanese products that could be discontinued or are supplied only at the discretion of the Americans or the Chinese, depending on who prevails. The European Union is thus opening partnership agreements with Japan, South Korea, and Singapore, and is working on the creation of a European microprocessor hub.

The second line along which EU foreign policy would like to develop is to compete with the Chinese Belt and Road Initiative via a similar European initiative. This aims at the promotion and facilitation of European exports and investments. How this will pan out is still hard to judge as all investments are now concentrated on the recovery plan.

The other actors in the game

Another system of alliances in this area that has now been reactivated is the so-called QUAD, which sees Australia and two giants such as Japan and India as associates under American leadership. Here too there are summits, joint military exercises and ongoing diplomatic talks. For now the United States obviously prefers to develop different systems of alliances with variable geometries, depending on the degree of involvement of the countries involved, rather than a single Maginot line, although it is also obvious to a child which side is the enemy and who is the object of so many diligent diplomatic initiatives.

In particular, in the last two years there has been a crescendo of diplomatic and commercial discord between China and Australia. In March 2021(6), the Australian Parliament enacted a law whereby every contract signed by individual states, municipalities, universities, public or private entities had to be approved by the federal government. The latter had already vetoed the Belt and Road Initiative contract that was was signed in 2018. It has also become the standard bearer for an international investigation into the Chinese management of the coronavirus. China has reacted by raising tariffs on a series of Australian products like meat, barley, and wine, but not on iron, of which it is one of the main exporters in the world. Canberra is also entering into a series of military and cyber-security deals with South Korea.

In conclusion

It is obvious that capitalism is preparing a new conflict of global significance and is not afraid of pushing the planet to the brink, not only environmentally, but now openly on the economic and social level as well. Even if sometimes unconsciously, capitalism pursues the idea which every sensible human being instinctively hates and rejects: the idea of destruction, as its salvation, its resurrection. By devaluing capital and obtaining the much desired "creative destruction" according to the famous Schumpeter definition, capital would then have paved the way to restart a new cycle of accumulation as after the previous wars, regardless of the effects that this "regeneration" would have on the planet and on its population

Capitalism has had the "undeniable merit" of making the earth and everything that happens there a single narrative, a single destiny valid for all, even if in different forms. We hope that the time may come when this history is snatched from its greedy and reckless hands and returned to those members of the human species that have been able to free themselves from its control, something which cannot happen without a proletarian revolution.

Battaglia Comunista
21 November 2021


Translated from Italian 10 January 2022


(2) Marco Lupis. Tokyo provokes China on Taiwan, a diplomatic slip that can destabilize Asia,

(3) China Openly Declares its Imperialist Ambitions

(4) Xi Jinping himself talks only of “reunification” does not us threats of military force in his speeches but his generals are less coy. See, for example:

(5) China: Long Held US Fears Becoming Reality?

(6) AUKUS: Another Preparation for Imperialist War

Wednesday, January 12, 2022