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© Getty Images Welcome
back from the holidays, Swampians. January is a time to think about the
biggest economic and political questions of the coming year, and how
they may play out. One of the top issues on my list is Taiwan. Always a
hot button between the US and China, Taiwanese independence was thrust
further into the spotlight, after Nancy Pelosi’s controversial visit to
the island and Joe Biden’s statements about the US willingness to defend Taiwan militarily against any Chinese invasion. While
I admire the president’s unequivocal support of a longtime ally, I’m
going to come clean and say that I feel very nervous about the US
position on Taiwan. I wouldn’t want my own son to have to go into a hot
war to defend the island. This is a tiny, Asian country that has done
almost nothing to bolster its own military position. It used to be part
of China and probably will be again at some point. That’s simply the
truth of the matter. The US relationship to the nation (like so many
relationships abroad) reflects a postwar moment in time that has long
since ended as the continent has become richer and more developed. China
has become the clear regional leader and is now vying with the US for
global leadership in many areas (see my column tomorrow on the rise of
the petroyuan and what it could mean for energy markets and the
dollar). Let
me be clear — I don’t think we are going to see any Chinese moves on
the island in the short term. China has its own debt troubles and Covid
outbreak to deal with right now. But a US foreign policy that pretends
that America can and would simply go straight into a hot war in the
South China Sea with or without help from its Asian allies is worse than
a bluff — it’s a dangerous denial of the reality that the US is no
longer the dominant power in Asia. To continue this denialism it is to
flirt with total disaster. For
starters, what does the end game of a military defence of Taiwan look
like? Not pretty. There’s no way China backs down from this one. And
other Asian nations that have to live with China in their backyard are
unlikely to want to take sides. Most are hedging their economic bets
between the US and China, hoping to find a way to live in between the
giants until a new world order emerges. (This is making countries like
Australia, which is being forced on to something close to a war footing,
very nervous). I’m
hoping that this year will bring less talk about any possible military
ventures in Taiwan, and more facts about supply chain vulnerabilities in
a decoupling world. (I’m a big of the bipartisan bill
put forward recently by Senator Marco Rubio and Representative Ro
Khanna to require cabinet-level agencies to identify supply chain
weaknesses). It’s absurd that the US is doing anything to raise the
stakes at a time when we have yet to even understand the economic
ramifications of, say, a South China Sea blockade. Beyond this, I’d agree with Chas Freeman’s recent piece
arguing that the US must find a way to support a new Asian security
architecture without having to “lead or dominate” it. While I wouldn’t
want to the US to abandon Taiwan completely, I am for moving away from
their semiconductor industry, supporting Taiwanese immigration to the
US, and finding ways to engage that don’t raise the possibility of war
with China. The question is how to tip-toe away from the current
rhetoric around Taiwan without making allies feel that the US has pulled
another Afghanistan, or emboldened Russia in its war on Ukraine. |