3 Reasons Why Taiwan is NOT the Next Ukraine
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Russia and Ukraine…it’s basically all the world has been talking about the past two months and despite this intense conflict in Europe some are already speculating the next potential Ukraine could be Taiwan. While many people believe China is carefully watching Russia’s every move and planning their big attack. I think it’s important we approach this topic with some rational thinking and in today’s article I’m going to present 3 reasons why Taiwan will NOT be the next Ukraine.
The first reason is that China relies heavily on Taiwanese technology to power key industries. China’s government has stated it will double its GDP by 2035, as China becomes the world’s leader in AI and develops the world’s first 6G network. To achieve these goals China needs access to Taiwanese semiconductors, most specifically it’s chips which power everything from toasters to electronic vehicles. Currently Taiwan accounts for 92 percent of global chip production and its largest producer Taiwan Semiconductor Manufacturing Company has been selling a significant amount of mid-level chips to China. In 2021, revenue from Mainland China accounted for nearly 5.62 billion dollars.
A potential war between China and Taiwan would devastate the chip industry and wreak havoc on the entire world economy. A one-year disruption to the Taiwanese chip supply would cost global tech companies roughly $600bn, according to a study by the Boston Consulting Group. In addition, if a war destroyed Taiwan’s chip manufacturing it would take approximately 3 years and an additional $350bn to rebuild Taiwan’s chip producing factories. I don’t believe this is a risk China is willing to take as growing its economy and improving the prosperity of Chinese citizens has been the top priority for China’s government.
Now we’ve established that China’s economy depends on Taiwanese technology, but the second reason Taiwan will not be the next Ukraine is simple. China is China and Russia is Russia, and it’s irresponsible to think that China will simply follow Russia and start an invasion. To better understand this, let’s examine how the two countries and their respective leaders have have acted over the last few decades.
To start Russia’s military has been very aggressive over the years with Russian armed forces completing multiple overseas combat missions in several countries including Georgia, Syria, Kazakhstan, and of course Ukraine. On the flip side, China has been involved in minor border disputes with its neighbors like India but over the years China has refrained from massive interventions of other countries, it’s last invasion took place in Vietnam some 4 decades ago.
Interesting enough in the past few decades China’s largest deployments of troops overseas have been on UN Peacekeeping Missions. We can even notice the difference between Russia and China’s overseas military bases. Currently Russia operates over 21 military bases around the world, whereas China has only one official military base on foreign soil in Djibouti which was made to help protect against piracy of trade ships in the trouble waters off the coast of Africa. However, as an American I have to speak carefully when I mention overseas military bases as my home country has seemingly put a US military base on every corner of the globe with over 800 military bases in 70 countries. It’s no wonder that former President Jimmy Carter called out country the most warlike nation in the history of the world.
The differences between Russia and China’s leaders are also quite different. While Putin at certain times has been very aggressive to the West, President Xi has invested a lot of time and resources to showcase that China is willing to work with all countries around the globe. China is interested in pursuing “win-win” solutions and as Xi stated in a 2018 speech, a “community with a shared future for mankind”. This is why China has remained committed to reducing its carbon footprint, something even the United States failed to do when former President Trump backed out of the Paris Accords. Thankfully President Biden returned the US back to the climate change agreement within hours of becoming sworn in as President. Climate change is a probably the biggest issue facing our world today and it’s imperative the US and China work together for a better future.
China is already the world’s largest producer of renewable energy and Chinese tech giant Huawei recently help Turkey build the world’s largest solar farm, providing energy to 10 million people every year. Of course, the flagship project that best demonstrates this goal is China’s Belt and Road Initiative (BRI) which has already completed over $11 trillion of trade between 70 countries since its founding in 2013. In investing we often say that past performance doesn’t guarantee future results, but it is often a great predictor of what’s to come and I think this applies to China. I can’t see China wasting decades of hard work in building the largest trading network in the world, lifting hundreds of millions out of poverty and then throwing it all away to fight a war over Taiwan. And this leads me to my third and final reason that Taiwan will NOT become the next Ukraine and that is simply the official status of Taiwan already favors China.
One of the biggest issues between Russia and Ukraine is that Putin is not satisfied with Ukraine being a sovereign nation. In Putin’s mind Ukraine is a part of Russia and Ukrainian people are ethnically Russian. Every country around the world recognizes Ukraine as a sovereign nation, including China who last year celebrated its 30-year anniversary of diplomatic relations with Ukraine. However, since 1972 the United Nations has officially recognized there is only one China and that Taiwan is part of China. This is also a policy that is echoed by every major country around the world. When people ask me “Cyrus, is Taiwan part of China?” my simple response is even my own government the United States recognizes that Taiwan is part of China and respects the one China policy.
In closing I feel there is no outcome of an invasion that China benefits and like I pointed out in an earlier YouTube video entitled “The US is preparing for something bigger than Russia Ukraine” I mentioned the biggest potential threat to a Chinese invasion of Taiwan is not China but American intervention:
I’ve laid it out very clearly in today’s article the three main reasons why Taiwan will not become the next Ukraine. China is dependent on Taiwanese technology to grow their economy; China has a proven track record of being very different from Russia in how it handles its foreign affairs and finally Taiwan is already internationally recognized as part of China. IMO, the status quo will continue for the foreseeable future and the only scenario that could lead to war is if America put naval ships around Taiwan and encouraged the island to declare independence. This of course would lead to China militarily defend its sovereign land and unfortunately would be the start of a devastating conflict between the two world superpowers. This is why smart diplomacy is desperately needed between the US and China.
So the next time you read that China is carefully watching Russia’s invasion into Ukraine and seeing if there is an opportunity to mount a surprise attack, don’t buy into it. This is fear mongering and it’s worth repeating, China has nothing to gain from declaring war on Taiwan. Instead, China will focus right now on getting through this difficult wave of Omicron in Shanghai, keeping its citizens safe, and restarting its economy which once again depends on a healthy relationship with the #1 chip manufacturer in the world, Taiwan.