Taiwan-China faceoff: A look at how Beijing & Taipei depend on each other as tensions rise

Enraged China, last week, slapped a series of punitive trade curbs on Taiwan after top US lawmaker Nancy Pelosi visited Taipei to display Washington's stance against changing the status quo of the Indo-Pacific. Immediately after, Beijing also launched live-fire drills, military manoeuvres, and maritime exercises, flexing muscles against Taiwan.

Chinese Commerce and Customs Ministry expanded the restricted trade to include a ban on imports of Taiwanese citrus fruits, and a variety of fishes. Beijing cited compromise in food quality and "presence of coronavirus" in shipments from Taiwan.

Additionally, China Taiwan Affairs Office said that it will suspend dealing between mainland companies with Taiwanese foundations, after Beijing repeatedly warned of "serious consequences" against Pelosi's Taiwan trip.

As of now, over 100 Taiwanese brands, especially perishable and non-perishable food export, are left off renewing their shipment license.

On the other hand, a series of bans and military drills also left China deprived of the Taiwanese semiconductor chip market, without which China's tech industry is likely to be crippled.

How integrated are China and Taiwan's economy?

Taiwan is a small island in South East Asia with a population of 23 million. The country is known for its semiconductor, optical, and microchip manufacturing, which is largely significant for automotive, computer tech, and many more industries. According to a DW report, China is Taiwan's most important trading partner with about 42% of the exports brought by Beijing. On the other hand, Taiwan also imports about 22% of its purchases from China, including soil that is mandatory for infrastructural development on the island. Trade (goods and services) exchange between both countries amounted to some $166 billion in 2020.

Taiwan-based companies alone have invested around $194 billion in total for 44,000 projects between 1991 to 2021. Simply put, a ban on trade with Taiwan will render a hard blow to the Chinese economy- whose GDP is thrice lower than Taiwan  (i.e. $12,259 per capita (China) to $33,775 per capita (Taiwan) as per International Monetary Fund). Although Beijing has frequently promoted self-dependence with initiatives like 'Made in China 2025', the administration is yet to catch up.

Potential threats

China is adamant about recapturing Taiwan and reinstating the island under Beijing's administration, with force if necessary. The scenario is imminent, provided China achieves its self-dependence goals by 2025. With repeated escalation along the Taiwan coast, the possibility does not appear to be a long shot, said Roderich Kiesewetter, German security expert and chairman of the Foreign Affairs Committee in the German Parliament.

"Until now, our parameters were such that we said: If China is able to produce semiconductors with the same precision, speed and quantity — and that probably wouldn't be until 2027 — then an attack is likely," he said on a TV interview, as quoted by DW.

His predictions also come at a time when war experts indicated that Beijing is taking lessons from Russia's failures in Ukraine. However, as per DW, some counterarguments say Beijing is more inclined toward business ideologies than asserting pressure over Taiwan for an annexation.

Meanwhile, on Sunday, Beijing sent at least 66 aircraft and 14 warships to conduct exercises near the border regions of Taipei. This came after Beijing launched 14 PLAN (People's Liberation Army Navy) vessels and 66 PLA (People's Liberation Army) aircraft were detected on Sunday until 5 PM. In response to the massive Chinese flare-up following US lawmaker Nancy Pelosi's visit to Taiwan, Taipei on Monday announced that is set to launch live-fire drills in Pingtung County. The planned exercises will be carried out on Tuesday and Thursday to display combat readiness amid Beijing's live-fire drills around Taiwan coast, according to CNA. The Army’s 43rd Artillery Command, 333rd Mechanized Infantry Brigade, the defence commands in Taitung and Hualien, and the Coast Guard are expected to participate in the coming drills.

(Image: AP/Unsplash)