China-Taiwan Crisis and its Implications for India – Explained, pointwise

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The tensions between the US and China are at their worse in the recent times over the visit of Speaker of the US House of Representatives to Taiwan and the consequent China-Taiwan Crisis. China had been warning the US about grave consequences before the visit. Since the Speaker went ahead with her visit, China’s People’s Liberation Army is now conducting massive military drills in the Taiwan Strait. Although, the US has played down the visit and has called the visit a private affair of the House Speaker. The US has confirmed that nothing has changed about the US’ ‘One-China Policy’ and the US does not support Taiwan’s independence. Nevertheless, tensions in the Taiwan Strait will have profound implications for India as well. Some foreign policy experts have argued that it’s time India should review its ‘One-China’ Policy amid tensions on the northern borders. 

About the China-Taiwan Dispute

The Taiwan dispute has roots in the early decades of the 20th century. After the collapse of the Qing dynasty and the revolution that made China a republic in 1911, there was a bitter power struggle between the nationalist Kuomintang (KMT) under Chiang Kai-shek and the Communist Party of China (CPC). 

In 1927, after a massacre in Shanghai, the Communist Party rose up against the Kuomintang government, leading to a bloody civil war. The internal was put on a pause during the World War II (WW II) and the Japanese invasion, but resumed again in full force after the WW II. 

In 1949, the Communists under Mao Zedong won the war. The leaders of Kuomintang fled to the island of Taiwan, established Republic of China (ROC) Government and moved their capital from Nanjing to Taipei. The Communist Party took over mainland China and established People’s Republic of China (PRC) Government. Taiwan was a Japanese Colony from 1895 to 1945. The Communist Party of China (CPC) views Taiwan as a renegade provide and aims to unify it with Mainland China. Taiwan argues that it was never a part of the modern Chinese State (PRC).

The relationship between the two nations improved in the 1980s. In 1992, China’s CPC and Taiwan’s KMT leaders signed an understanding although there were differing interpretations regarding One-China.

However, in 1995-96 the two countries came close to a military conflict. Taiwan’s President was steering the country’s foreign policy away from the ‘One-China’ theory to a ‘State-to-State’ principle that meant China and Taiwan ought to engage as two separate States. Economic relations improved in late 1990s with the last Kuomintang government adopting a more Beijing-friendly position. 

The relationship has soured since 2016. The main reasons are more aggressive nationalism under China’s Xi Jinping and the firm stance of Taiwan’s Tsai Ing-wen (President) regarding independence from China. The relationship is at a new ebb with the Speaker’s visit and given rise to the current China-Taiwan crisis.

China-Taiwan Tensions UPSC

Source: Reuters

From 1949 to 1979, the US had recognised Taiwan (ROC) as China. However, when the US established ties with the Communist Party and the PRC, it recognised PRC as the ‘sole legal Government of China’. and de-recognised Taiwan (ROC).

As of 2022, only 15 countries recognise the ROC. Even international inter-governmental bodies like the United Nations and the World Trade Organization don’t officially recognise the ROC.

What is the political significance of the US House Speaker’s Taiwan visit?

The visit has reassured the US’ allies of its commitment towards the Indo-Pacific. The visit further establishes Taiwan as a part of the US’ Indo-Pacific strategy even though Taipei was not invited to be a part of the Indo-Pacific Economic Framework (IPEF). 

The visit sends an important message to other countries in the Indo-Pacific that the US is indeed serious about Taiwan as part of its countering the China challenge.

What are the reasons behind current China-Taiwan Crisis?

First, top leaders of Taiwan and  China have shown a contradictory stance over their relationship. 

Taiwan’s View: It will not accept the China’s use of ‘one country, two systems’ to downgrade Taiwan and undermine the cross-strait status quo.

China’s View: Resolving the Taiwan question and realizing China’s complete reunification is a historic mission. China calls for resolute action to utterly defeat any attempt towards Taiwan’s independence.

Second, the Taiwanese have democratically elected governments, and greater prosperity and political rights, so they strongly oppose reunification. But formal secession would be costly because a Chinese law from 2005 warns of military action in case of secession.

Third, Taiwan’s legal status is a grey area, despite China’s rising global clout. Majority of countries don’t recognise Taiwan (ROC) as a separate nation, but 15 nations do recognise it. This recognition challenges the notion of ‘One-China Policy’ and China fears that more nations will give recognition to Taiwan in future. 

Fourth, Taiwan-U.S closeness is deteriorating China’s relationship with Taiwan. While the US has long maintained strategic ambiguity, the previous US administration (under President Trump) broke with this diplomatic policy by engaging more directly with Taiwan, infuriating China. 

What is the status of India-Taiwan Relationship?

India does not have formal diplomatic ties with Taiwan yet, as it follows the One-China policy. However, during the Chinese premier’s visit to India in December 2010, India did not mention support for the One-China policy in the joint communique. There has been no official mention of One-China since then. In fact, the ambassador of Taiwan was invited to the Official inauguration of the Government of India after the 2014 General Elections.

While following the One-China policy, India has an office in Taipei for diplomatic functions — India-Taipei Association (ITA) is headed by a senior diplomat. Taiwan has the Taipei Economic and Cultural Center (TECC) in New Delhi. Both were established in 1995.

India-Taiwan ties focus on commerce, culture and education. Although the relationship is its third decade, the ties have been kept low-profile deliberately, owing to China’s sensitivities e.g., Parliamentary delegation visits and legislature-level dialogues have stopped since 2017, around the time the India-China border standoff happened in Doklam.

However, more recently, India has tried to play up its relationship with Taiwan, as its ties with China have been strained. In August 2020, the Government formally condoled the death of former President of Taiwan, Mr. Lee Teng-hui. He was described as ‘Mr. Democracy’; a political message directed to China (with poor democratic credentials). The present Taiwanese Government is keen on expanding areas of cooperation with India as it is one of the priority countries for Taiwan’s New Southbound Policy.

Till now, the relationship had largely been an economic and people-to-people relationship. However, amid rising tension with China, India and Taiwan are paying attention to bolster their ties.

What are the implications of China-Taiwan Crisis?

First, Taiwan is the world’s leading chipmaker, and home to Taiwan Semiconductor Manufacturing Corporation (TSMC), which holds 90% of the market for advanced chips that power computers and phones. Disruption in the exports of chips will lead to global shortage of electronic goods and appliances, automobiles and other manufacturing industries dependent upon semiconductor chips. 

Second, it will lead to militarization of the region. China has started its military operations against Taiwan while the U.S stationed four warships close to the East of Taiwan. The intensification of the situation may invite more players to the conflict and fuel more militarization.

Third, any extreme military action and forced annexation attempt might result in a Russia-Ukraine-like conflict. This will be detrimental for the global economy, which is already facing recession fears amid the war in East Europe.

Fourth, India’s trade with Taiwan has risen rapidly in the last decade. India imports iron and Steel, electrical machinery, electronics and chemicals among other things from Taiwan. Disruption in the India-Taiwan trade and a global recession will further add to domestic inflation and slowdown economic growth.

India-Taiwan Trade Taiwan-China Crisis UPSC

Source: India Today

What lies ahead?

First, China can intensify its attacks on and around Taiwan’s territory. It will only worsen the China-Taiwan Crisis. There were cyberattacks on Taiwanese government websites. Exports of some limited items from Taiwan has also been banned by China. There have been encroachments into Taiwan’s Air Defence Identification Zone.

Second, the western countries may impose sanctions on China if it continues its intrusion in Taiwan’s territory. It is doubtful if China can withstand economic sanctions at this stage as it already needs to stabilize its rapidly nosediving economy. An indication of political and economic response by the Western Governments in the form of economic sanctions, in case China doesn’t reduce its aggression, can send a message to China.

Third, India should try its best to be part of all attempts to scale down the crisis situation without getting drawn into the vortex of the flashpoint.

Greater economic partnership with Taiwan should be followed up by encouraging the domestic manufacturing sector, removing all impediments, liberalizing tax laws and strengthening the supply chain mechanism.

Fourth, some foreign policy experts argue that India must be more forthright in its criticism of Chinese aggression on India’s borders. A small nation like Taiwan withstood immense pressure and went ahead with the Speaker’s visit with high-profile meeting. India on the other hand, continues to downplay border stand-off with China domestically as well as at international fora. The fear of disruption in economic ties may be unfounded, as China is stand to lose more than India if trade ties are cut-off.

Fifth, India should also focus on finding alternate destinations of critical import/export items that are traded with Taiwan as escalation of conflict can choke the supply. Amongst them, the most critical item is semiconductor chips.


For the international community, it is vital to consider the meaning of isolation of Taiwan. It means an aggressive and emboldened China and greater chances of China invading Taiwan. This situation can’t be beneficial for geo-political stability of the region and maintenance of international order.

Syllabus: GS II, Effect of Politics of Developed and Developing Countries on India’s Interests.

Source: The Times of India, The Times of India, Indian Express, Mint, The Hindu

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