Taiwan and China’s Exceptionalism

Tokyo’s statement on the island and its security reveals an open wound: China’s ambitions in the East China Sea, amid increasing regional hostility, and the outcome remains very uncertain.

The Japanese PM Sanae Takaichi’s recent statement on Taiwan (the island, de facto independent but de jure part of one China) shifted Asian and global dynamics in a new direction. It was carefully crafted, clearly stating what Tokyo has considered the truth for years – that Chinese military actions or a naval blockade on Taiwan could pose an existential threat to Japan. 

It put China in a tough position. 

If China ignored it, domestically, it could be seen as encouraging “Taiwan’s drift.” If Beijing had reacted as it did, there would have been a big fuss. The reaction so far seems carefully designed to scare the Japanese and global public opinion, but not to escalate out of control. 

Taiwan is not a barren land in the middle of nowhere; it’s strategic because of its location, its unique microchip industry, and its appeal to overseas Chinese. When Beijing controls Taiwan, it cuts off South Korea and Japan—the two most industrialized nations in Asia—from the rest of the continent, and vice versa. This action also effectively increases China’s grip on the South China Sea, putting the rest of the region on the defensive. A return to China would strengthen Beijing’s power.

The underlying question behind Takaichi’s statement and Beijing’s response is: will Asia — and eventually the world — accept China’s rise as a significant regional and global power? If so, then it can peacefully pursue “the reunification” with Taiwan by any means. If not, then Taiwan’s reunification poses a threat. 

China loves talking about America, but its biggest problems are in Asia. China might think that without US support, Japan and the rest of Asia would surrender to China. It could also be the other way around: without Asian urging, the USA might be less firm with China. Beijing seems unable to break this ‘vicious circle’ (for China). And the circle gets tighter. 

A key issue is that China is overly anxious about its own security and quite cavalier about other countries’ security concerns.

Still, if China scales back its ambitions toward Taiwan, the island might shift politically, and Beijing’s influence over the South China Sea could weaken. In that case, China would be surrounded, with Russia and Central Asia at its rear—difficult neighbors. 

Problems arise whether China advances or retreats. Still, the USA sought a practical compromise.

In the early 2000s, the Bush administration, with its concept of the “responsible stakeholder,” and later the Obama administration in 2009, with its proposal to reduce polluting emissions, offered China significant opportunities for growth and international settlement. However, China rejected both offers, possibly believing that America was in decline.

Does China like the US?

There is an American exceptionalism, and China now apparently claims its own exceptionalism, as US analyst Dennis Wilder aptly described in an interview.

But the USA provides global security for many countries. These nations have reduced their own defense spending because the US takes care of them, thereby increasing the American burden and causing friction between the US and its allies. The US, in fact, complains that allies should do more to defend themselves, hardly an American concern about China.

The USA’s current role is due to Europe calling for and pushing for it three times over the past century. Once, it was to support some countries against others (WWI); twice, to fight dictatorships (fascism and the USSR); and once, it fought the global rise of Islamic extremism.

China’s defense, conversely, is solely about China; it has no clear global mission. No one has asked China to protect it from any threat, and China does not proclaim any international goal or role. The USSR or Islamic radicalism claimed an international role. The US defends itself and the world against global threats and has more than a century of experience doing so.

China declined the offer to be “a responsible stockholder,” meaning a seat on the board of global governance, to accept international rules, and to acknowledge that it was not the board’s chairman. However, being a stockholder could have provided a pathway to become “the chairman” of the board and eventually (gradually) to change the rules. 

Without all of it, any Chinese move on Taiwan can be seen as threatening and therefore disrupts the existing global order.

It could have advanced Taiwan’s agenda peacefully only if it had accepted the role of a “responsible stockholder.” If it wants to impose its exceptionalism without having saved the world, it may need to win a world war against the US and most of its neighbors. Can it do it? Can it scare all of them into submission without a war? Can it change its mind and course?

International China

Although it’s unclear whether it has the same clout as the US, China is a regional and global power. However, China has no ‘international-international’ agenda. Its goal is to defend its interests, but everything becomes very difficult without an international framework that also considers other countries’ interests (it can’t be the simple commercial “win-win” because if you win 99 and I win 1, it is still “win-win,” but the split is too uneven).

President Xi Jinping’s “Global Governance Initiative” may help fill the gap, but what exactly is it? China believes there needs to be some form of “global governance,” but it can’t be based solely on US and “Western rules”; it must also consider China’s interests. In theory, everyone might accept it, but the real challenge is in the details: what are China’s actual needs? Many issues could get complicated here. China might try to slip in some topics, like Taiwan, which were already very controversial and have become even more so now.

Still, some Chinese analysts believe that “the US refuses to recognize its own decline or manages its decline in the wrong way.” So, the Americans don’t want to compromise with China. They want to insist on monopolizing global power.

The statement raises several issues. What is the compromise China proposes? Is the US truly declining? Is China certain about this? If the US is not declining, what actions will China take? Isn’t it risky to assume the US’s decline and jeopardize China’s position based on potentially mistaken assessments? Shouldn’t China exercise more caution?

Meanwhile, China nearly lost a war. In Gaza, at the start of the conflict, China supported Hamas and the Palestinian cause. Hamas has been discredited, its sponsor Iran has lost almost all its proxies in the region, and the US has reached a regional peace deal, excluding Russia or China.

Furthermore, a doctrine on China from President Donald Trump may be emerging. America is attempting to build a bamboo curtain around China. It’s driving away China’s allies, such as Cambodia, which was offered a favorable tariff deal, and Kazakhstan and Indonesia, which are part of the Abraham Accords. America is also trying, for the first time, to strike a balance between Pakistan and India, who are united in their shared (though differing) concerns about China.

Pegged

Adam Tooze and many others claim that China is shaping a new world order centered on the RMB, which is artificially pegged to the US dollar, and its massive industrial and export capacity—almost half of the world’s total industrial output.

Yes, the Dollar-RMB peg is hard to break but also difficult to sustain. Similarly, global reliance on Chinese exports is challenging to undo and maintain. More countries are seeking greater political roles. However, unlike China, these countries do not pose the same broad range of challenges—military (rising cyber, nuclear, naval threats), geopolitical (Taiwan, South China Sea), ideological (not democratic), cultural (non-Western). Their ambitions often clash not only with the US’s role but also with China’s aspirations.

Furthermore, what positive impact did China have on the world? It kept inflation low for 30 years with its inexpensive products. This was a very important contribution. However, it also came with the price of many job losses in developed countries.

China might attempt to strengthen its role and grow trade with new partners, but it could stir controversy. A rise in China’s surplus results in fewer jobs in countries that import from China.

Will the blackmail of rare earths and the formidable industrial capacity be enough to influence the will of the United States and its neighbors in China? Will the United States manage to free itself from reliance on Chinese rare earths? And if it does, what will come next? Will China retain its industrial monopoly for about a decade, and what then? Currently, with China having the upper hand, Beijing may be unwilling to compromise. However, the group of semi-hostile nations surrounding China could make its position difficult, as they look into the unfinished wound of Taiwan.