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Taiwan: a political pressure cooker – El Sol de México

Nancy Pelosi’s recent visit has many implications. I will try to break some of them down to share my perspectives beyond the likes and dislikes towards China or the United States (EU).

Background

The historical ties between the People’s Republic of China (RCP) and the Republic of China, better known as Taiwan, are deep, complex and age-old. It cannot be forgotten that they share the same language, religion, customs, but they are divided not only by the Strait of Formosa, but also by political and social ideology. Taiwan was controlled by China until 1945, the year in which the communist revolution triumphed after the civil war that began in 1927. That is, the socialist regime won and the People’s Republic of China was created under the leadership of Mao Tse Tung. However, those who lost their political struggle, in search of democracy, fled to Taiwan. In 1949, there was a watershed between these two ways of seeing a nation-state. So from that date the PRC and Taiwan are in a sensitive and delicate relationship not only for both nations but for the rest of the world.

Diplomatic relations between China and the US were established in 1979 under the “one China” principle. They signed an agreement where the US undertook to recognize it as a single state. This is not disputed with the fact that China accepted that the EU-Taiwan relationship would continue under issues of cooperation, tourism, trade, investment, among others. Decades have passed since that moment and the world has changed. China is no longer what it was 40 years ago and the US is not in the same scenario that prevailed back then. The US sells military equipment to the island, trains its army and has made it a great ally. China is Taiwan’s main trading partner but does not look favorably on its closeness to Washington.

The Nancy Pelosi Tour

Until a couple of weeks ago, the China-US relationship was under scrutiny but with a certain impasse. It is a political relationship that is handled with tweezers and a very close commercial relationship. But when it became known of a parliamentary diplomacy tour by the leader of the House of Representatives of the American Union, the alarms went off when information was leaked that one of the stops on said tour would be to Taiwanese territory. A week ago there was a phone call between the leader of the Asian giant and his counterpart of the American eagle.

The topics covered were the following four.

  1. Trade: possible scenario of more tariffs by the EU.

  2. confrontation and rivalry: how to cope with them in the current situation.

  3. war in ukraine: consequences and the position of each party.

  4. Taiwan: tension, rise of tone and volume due to the visit of Nancy Pelosi.

Regarding Taiwan, the Chinese president was clear and firm in expressing his anger that Nancy Pelosi visited the island. She occupies the third most powerful position in the US. From the Chinese perspective, this would violate the agreement signed since 1979. Let us not forget that this year Xi Jinping is seeking his third term during the 20th National Assembly of the Chinese People’s Party to be held in three months.

The leader of the Asian giant is consistent between what he says: “those who play with fire, will burn” and what he does. That is why I have said that the consequences that the US will have to pay will be through three pillars:

  1. Technological. China will continue to develop its own technology from the military and space fields to the most sophisticated industries. But in addition, it will continue its search to access Western technologies where it has faced refusals to buy them due to the fear of the US that it will fall into their hands. It is not only an issue of intellectual property rights but of national security.

  2. Commercial. China will seek a way to “bend” the US through different strategies. These measures will range from imposing restrictions on exports, as it is already doing with natural sand to Taiwan, to imposing tariff and non-tariff barriers on imported Taiwanese and US products. From this last point we already see reactions with the Chinese government’s instruction to Chinese suppliers of the Apple firm, to suspend all their shipments. The same happens with the Chinese company that produces CATL batteries (Contemporary Amperex Technology Co. Ltd.), which has announced that it is stopping the project to open the plant -in US territory- scheduled to supply batteries for Tesla and Ford.

  3. Financial. If Putin already seeks a new international financial architecture, through the weakening of the dollar as the hegemonic currency by imposing that what other countries import be paid with Russian rubles, Xi Jinping will seek to further strengthen the yuan.

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