After days of rain, the clouds parted over Taipei last Saturday afternoon just in time for up to 180,000 people to take part in the city’s annual Pride march. The biggest LGBTQI event in east Asia, it drew visitors from around the world with Ru Paul’s Drag Race champion Nymphia Wind the star attraction.
Among the participants was Taiwan’s vice-president Hsiao Bi-khim, whose governing Democratic Progressive Party (DPP) has championed gay rights. Taiwan led Asia in legalising same-sex marriage in 2019, two years after the self-governing island’s highest court ruled that its prohibition was unconstitutional.
Saturday’s Pride march could not have taken place in mainland China, where the authorities are tolerant towards homosexuality but not of activism or civil rights demonstrations. For Taiwan, the annual parade has become an emblem of the liberal democracy that has developed there since the end of martial law in 1987.
Although Washington switched its diplomatic representation from Taipei to Beijing in 1979 and the island now enjoys full diplomatic relations with only a handful of countries, the United States remains Taiwan’s main protector. Tensions between Washington and Beijing over Taiwan are the most likely trigger for military conflict between the world’s two most powerful countries and the island is watching closely as the US prepares to choose a new president next week.
While most of America’s allies in Europe fear the prospect of Donald Trump’s return to power, however, Taiwan has mostly positive memories of his first term in office.
“Back in 2016, a lot of Taiwanese voters were actually quite supportive of Trump. They saw Trump as a Republican president who might be able to take a tougher stance on China. And indeed, Trump did do a few things that are good from the Taiwanese perspective. For instance, when Trump was elected, he had a phone conversation with president Tsai [Ing-wen],” said George Yin, senior research fellow at the Centre for China Studies at National Taiwan University.
“By 2020, a lot of them saw Trump as an American politician who had the courage to take on China and provide more and more support for Taiwan. And at the same time, they were a little bit sceptical of the Democratic administration. They were worried that if we get [Joe] Biden, maybe the US would dial the clock back and become less supportive of Taiwan. But of course, that didn’t happen. I think a tougher stance towards China is a bipartisan consensus in Washington DC.”
Tsai, who stepped down as president after two terms in office earlier this year, developed a good relationship with Biden, who has continued Trump’s tough approach towards Beijing. On four occasions since he took office, Biden has said that the US would come to Taiwan’s defence if Beijing invades the island, a departure from Washington’s policy of strategic ambiguity on the issue.
During the current campaign, Trump has told Taiwan it should pay more for its own defence and eventually increase its military budget to 10 per cent of GDP, three times the proportion the US spends. In an interview with podcast host Joe Rogan last Saturday, Trump reiterated a claim that Taiwan had “stolen” the US semiconductor business and called for the island to pay Washington to protect it from Beijing.
“The argument is that just as in the case of Europe, Taiwan shouldn’t be freeriding US security assistance. Taiwan needs to defend itself so that the US could help Taiwan. That’s not an entirely unreasonable proposition from the US perspective,” Yin said.
“There’s bipartisan support for Taiwan. It’s very strong support. I don’t see how Trump would significantly reduce US support for Taiwan.”
Separated from mainland China by the Taiwan Strait, Taiwan lies between the East China Sea and the South China Sea, one of the world’s busiest shipping routes. It is at the centre of the first island chain, a cold war term used by the US to refer to a string of islands and archipelagos stretching from Japan down to the Philippines.
If Beijing were to take control of Taiwan, it could limit Washington’s freedom to operate in the western Pacific and diminish its capacity to defend allies in the region. Taiwan is also strategically important as the producer of most of the world’s semiconductors and almost all of the most advanced ones.
The global boom in investment in artificial intelligence (AI) has created a surge in demand for the chips that power the technology and in profits for Taiwan Semiconductor Manufacturing (TSMC). TSMC has been hit by a US ban on the export of advanced chips to mainland China but most of the growth in Taiwan’s exports is now in the American market and the Chinese market is waning.
“The economy is doing great but there are two major risks, worsening income distribution because of asset price inflation and inflation in general. Second, the geopolitical risk is only increasing and by now I think people realise, foreign investors also, that this is not going to go away,” said Alicia Garcia-Herrero, the Taiwan-based chief economist for Asia Pacific at the French investment bank Natixis.
“The ideal conditions are of course the status quo. Taiwan sells to China, sells to the US, all are happy. But that status quo will not happen because China doesn’t want it. You can see that China wants reunification, full stop. So what Taiwan feels is the best solution is no longer what China chooses.”
Taiwan’s new president, William Lai, used his inauguration speech last May to adopt a more assertive rhetoric towards Beijing, dropping some of Tsai’s nuance. He repeatedly referred to Taiwan as a nation and made no reference to the negotiations between Beijing and Taipei in 1992 under which both sides agreed on a One China policy but each could decide for itself what that meant.
Tsai did not accept this so-called 1992 consensus but in her inaugural speech in 2016, she said she respected the understandings as a historical fact. Although Beijing condemned her as a dangerous separatist, the former president was skilful at avoiding confrontation and made sure to keep Washington on board.
Shu-ren Koo, managing editor of CommonWealth magazine and one of Taiwan’s leading foreign policy commentators, believes Lai’s rhetoric reflects the development of the DPP’s thinking on independence.
“In the beginning, they wanted to get rid of everything about China from Taiwan, the Republic of China, the constitution. They wanted to make a new constitution. They wanted to change the name to Republic of Taiwan. But after they become a governing party, they realised that it’s almost impossible to do that. Not only China opposed them, US opposed them,” he said.
“So they changed their way to push for independence. I call it the Republic of China style. Right now, they say, Taiwan is already an independent country. Its name is Republic of China. So this is a different country. It’s an independent sovereign country. It’s different from the PRC (People’s Republic of China).”
Ming-Chi Chen is a former national security adviser to Taiwan’s government who also served as deputy minister in the Mainland Affairs office dealing with relations with Beijing. He believes that Lai’s inauguration speech reflected the new president’s conviction that no matter how hard he tried, he could not persuade Beijing to engage.
He said Lai’s speech caused some alarm in Washington but a second speech for Taiwan’s national day on October 10th offered some reassurance.
“I understand they were certainly worried about the inaugural speech. After that, I went to DC in August and several friends expressed their concern to me. But they were quite relieved this time at the October 10th speech. They sensed some self-restraint and a willingness to talk more about the Republic of China and even to admit that the Republic of China had 113 years of history,” he said.
“Trust is one element. The second element is predictability. China has to understand and have certain assurances that you will not deviate too much from your basic tone. I think so far, Lai has managed to keep it within the boundary. It’s very difficult.”
Taiwan’s government has been careful not to express a public preference about the outcome of the US election and it is preparing for both scenarios. But Chen believes that many of the DPP’s more ardent, pro-independence supporters have a preference for Trump.
“They thought the first Trump was quite positive for Taiwan. He managed to have what I call the paradigm shift in the attitude to and the policy towards China. The China policy made a big change in that time,” he said.
“Also the unpredictability of Trump, they think this is the personality it takes to negotiate with a dictator like Putin, like Xi Jinping.”
The government is more cautious and sees potential downside of Trump’s unpredictability for Taiwan, particularly if he makes good on his threat to impose blanket tariffs on imports. Kamala Harris remains an unknown quantity.
“We would like her to be able to continue President Biden’s Taiwan policy. We are under no illusions and we know there will definitely be some changes. But the security team will probably inherit that mentality,” Chen said.
“You will know what to expect. More predictable, a small deviation from the current policy towards Taiwan or China. There will be some change, inevitable change, but not a big deviation. Trump is not predictable. It could be very favourable to Taiwan, although I doubt it deeply. But I don’t know how he will deal with China. He’s not very knowledgeable about Taiwan. He thinks Taiwan is tiny. And he believes in spheres of influence.”
Both the Trump and the Biden administrations pressured Taiwan to move some of its chip production to the US and TSMC has opened a huge factory in Arizona. But the economics of semiconductor production in the US are tougher than in Taiwan, which has a complete and well-developed supply chain and a well-trained and motivated workforce.
Yin believes that Taiwan’s defence policy faces a shake-up regardless of the outcome of the US presidential election, adopting a new asymmetric strategy partly informed by lessons from the Ukraine war. And although Trump is more unpredictable than Harris, the Taiwanese government is confident that it can work successfully with either of them.
“I think one thing about Taipei is that it’s probably one of the relatively less anxious capitals these days,” he said.
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