Tokyo Global Dialogue

Tokyo Global Dialogue

Hung-mao Tien, Chairman INPR

Tokyo, Feb. 27, 2021

Introductory Remarks

l   In light of time limitation, I will address only to the issues related to the US-China-Taiwan relations in general, and the Cross-Straits matters in particular. I do this at the request of the organizer.

l   Let me spell out why I think Taiwan and the Cross-Straits relations matter a good deal in our analyses of the global and regional security issues.

l   Taiwan’s geo-strategic location is vitally important to the free and safe passage of the world’s most important sea-lane, stretching from Japan to the north, through Taiwan Straits, the South China Sea to reach India Ocean and beyond. Each year, approximately US$ five to six trillion worth of goods and commodities travel along this sea-lane.

l   China unilaterally claims Taiwan is a Chinese territory, if true, the Taiwan Straits would be regarded as China’s internal water. Then free passage becomes problematic, to say the least.

l   Taiwan is an inherent part of US first island chains of defense in the western Pacific, presumably to block China’s naval entry into the heart of the Pacific Ocean.

l   Taiwan has accomplished to become a stable and peaceful democracy, honoring universal values shared among the world’s democratic populace

l   Taiwan’s economy is closely linked to both the US and China. Notably, its high-tech industries are very important to the US industries, both in private business and defense sectors. In particular, Taiwan’s semiconductor industries occupy critical positions as the US and many other countries must have access to such industrial products. For instances, the semiconductor chips, which is the heart of IoT innovation. Some estimate the aggregate Taiwan semiconductor industries may amount to over 60% of the world’s total. The leading company TSMC is the only foundry in the world capable of producing the most sophisticated and reliable 5nm chips and ready to advance to manufacturing 3nm chips manufacturing next year in Southern Taiwan.

l   In the course of economic decoupling, the US industries must try to integrate Taiwan, Japan, and perhaps S. Korea plus Australia into re-structured production and supply chains. I understand this is already on official agenda.

l   Now, let me turn to the specific subjects assigned to me.

 

A.   Overview of Cross-Straits Relations in Perspective

l   Recent years Cross-Straits maintains status quo

l   Lack mutual trust, no political interaction

l   China continues to diplomatically isolate Taiwan

l   Periodic resort to military threat

l   Continue to attract Taiwanese investments, mutual trade shows no signs of drop-off yet

l   Cut off tourism and official dialogue

 

B. Under Trump administration: Taiwan and the Cross-Straits

l   US – China trade war, technological rivalry, military contest all add up to cozy relations between US and Taiwan

l   US strong anti-China consensus in public opinions, US Congress and the administration’s high policy elite circles led to favorable policy initiatives, plus passage of many pro-Taiwan laws already signed by the president

l   Arms sale to Taiwan elevated to high level, with more permissive sales in good quality products, closer military-to-military cooperation, among others

l   Restructuring of industrial supply chains draw US-Taiwan closer, growing interdependence in critical high-tech economy, in several sectors are under discussion. Among them, semi-conductor industries are regarded as most urgent. TSMC already has plans to establish foundries in Arizona and perhaps other states. Many related suppliers will also follow the TSMC.

l   Chinese tech companies gradually are being denied access to Taiwan’s high-end industrial components

 

C. Biden administration:

l   Initial concerns over Biden’s reversion to previous Obama China policy has quickly dissipated

l   Most sectors of the already up-graded US-Taiwan relations show little change

l   Taiwan’s geo-security, democracy and its values, almost unrestricted provisions of high-end industrial products continue to influence favorable US policy toward Taiwan in her Indo-Pacific strategic plans

l   General strategic posture toward China shows no visible shift, only tactical modifications are made; China remains US long-term stiff strategic competitor

l   China still imposing heavy-handed military harassment activities against Taiwan; nonetheless, coercive intimidation has yielded no better expected consequences, which means Beijing anticipated popular fear of China or admiration for its economic and military achievements is far from being prevailed in Taiwan’s mainstream opinions

l   President Tsai Ing-wen has sent initial signal for rapprochement across the Straits, but is yet to receive positive response. Taiwan is ready to reconsider any new formula to activate revival of Cross-Straits interaction.

l   China’s complex internal political and economic problems, plus possible power struggle make it unlikely for Beijing to seek a decisive solution on the Cross-Straits disputes at the present. Outright whole-scale military actions are simply too risky for the CCP regime, in particular for President Xi’s own political fortune.

 

D. 2021 is an important year for US-China relations and Indo-Pacific security, in general. Among others, in economic sector, there will be restructuring of industrial production and supply chains.

l   President Biden has just announced his intention to secure access to strategic products by reducing or rapidly scaling down dependence on foreign unfriendly sources. It is evident that the US has already taken steps to foster a loose semi-containment scheme among democracies against China and perhaps Russia as well. In political terms, the US is seeking common efforts to form closer ties among world’s democracies vs. the communists and other forms of authoritarian regimes

l   Thus de-coupling or bifurcation of economy, technology, finance and political value systems will be put on Washington’s high policy agenda; many democracies may be compelled to take side between the US-led industrial democracies as opposed to the China-Russia semi-alliance

l   Taiwan Straits, South China Sea, and Senkaku Islands (Diao-yu-tai) may face continuing Chinese military intrusion and harassments; limited military conflicts can not be totally ruled out in the foreseeable future

l   President Xi has concentrated in removing domestic political obstacles, to set stages for next year’s CCP 20th Party Congress which is expected to endorse his un-limited terms for leadership positions. There could be unforeseen political or military fall-outs originated in China’s internal maneuvers. Close attention is needed for all of all of us.

l   Beware of potential bubble bursts in worldwide financial-banking sectors as well as in stock markets this year.

 

 

E.  Japan’s roles

l   More active and positive roles in Indo-Pacific affairs are desirable, as US in the foreseeable future may have to focus on solving domestic coronavirus pandemic and economic problems

l   Closer ties between Japan, Taiwan, US and other democracies are desirable in re-formulating economic and technological production and supply chains to counter China’s ultra-nationalistic plans to achieve global hegemonic position

l   Closer cooperation of coast guards between Japan and Taiwan are necessary for mutual benefits, to deal with problems in the waters of western Pacific.

 

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