The most dangerous place on Earth - article for the Economist - May 1st 2021

THE TEST of a first-rate intelligence, wrote F. Scott Fitzgerald, is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. For decades just such an exercise of high-calibre ambiguity has kept the peace between America and China over Taiwan, an island of 24m people, 100 miles (160km) off China’s coast. Leaders in Beijing say there is only one China, which they run, and that Taiwan is a rebellious part of it. America nods to the one China idea, but has spent 70 years ensuring there are two.

Today, however, this strategic ambiguity is breaking down. The United States is coming to fear that it may no longer be able to deter China from seizing Taiwan by force. Admiral Phil Davidson, who heads the Indo-Pacific Command, told Congress in March that he worried about China attacking Taiwan as soon as 2027.

War would be a catastrophe, and not only because of the bloodshed in Taiwan and the risk of escalation between two nuclear powers. One reason is economic. The island lies at the heart of the semiconductor industry. TSMC, the world’s most valuable chipmaker, etches 84% of the most advanced chips. Were production at TSMC to stop, so would the global electronics industry, at incalculable cost. The firm’s technology and know-how are perhaps a decade ahead of its rivals’, and it will take many years of work before either America or China can hope to catch up.

The bigger reason is that Taiwan is an arena for the rivalry between China and America. Although the United States is not treaty-bound to defend Taiwan, a Chinese assault would be a test of America’s military might and its diplomatic and political resolve. If the Seventh Fleet failed to turn up, China would overnight become the dominant power in Asia. America’s allies around the world would know that they could not count on it. Pax Americana would collapse.

To understand how to avoid conflict in the Taiwan Strait, start with the contradictions that have kept the peace during the past few decades. The government in Beijing insists it has a duty to bring about unification—even, as a last resort, by means of invasion. The Taiwanese, who used to agree that their island was part of China (albeit a non-Communist one), have taken to electing governments that stress its separateness, while stopping short of declaring independence. And America has protected Taiwan from Chinese aggression, even though it recognises the government in Beijing. These opposing ideas are bundled into what Fitzgerald’s diplomatic inheritors blithely call the “status quo”. In fact, it is a roiling, seething source of neurosis and doubt.

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