Amid strained Sino-American relations and increasing cross-strait tensions, Taiwan holds its general election on January 13th, 2024 – and the world is watching anxiously. The outcome will have significance far beyond the region, independent of the election results.

Taiwan’s new leadership will be confronted with increasing pressure from Beijing, which regards the island as a renegade province and is seeking “reunification” – by military means if necessary. The EU should therefore strengthen relations with Taiwan at all levels possible and support the island’s participation in international organizations, all while firmly maintaining its “one China” policy.

Taiwan will hold its eighth free and fair presidential election and its ninth parliamentary election on January 13th, 2024. The ruling Democratic Progressive Party (DPP) has nominated current Vice President Lai Ching-te as its presidential candidate (the incumbent president, Tsai Ing-wen (DPP), has served since 2016, and is term-limited from running again).

The major opposition party Kuomintang (KMT) nominated New Taipei mayor, Hou Yu-ih, as its candidate for the presidential campaign. The Taiwan People’s Party (TPP), established in 2019 and thus a newbie in Taiwan’s political landscape, has nominated its leader, Ko Wen-je, the former Mayor of Taipei.

Although the KMT and the TPP had initially agreed to field a joint ticket in November 2023, the two sides were unable to reach a final agreement, and each announced their own presidential candidate. DPP candidate Lai is therefore leading in the polls and likely to win the presidential election. Prospects for a parliamentary majority are much more uncertain.

Increasing pressure from Beijing to be expected

Independent of the outcome of the elections, Taiwan’s new president and government will be confronted with increasing pressure from Beijing, which claims Taiwan as its own territory, although the People’s Republic has never controlled it. President Xi Jinping has made “reunification” with Taiwan a cornerstone of his broader political agenda to “rejuvenate” China as a regional and global power. In his New Year’s address on December 31, 2023, Xi declared:

“China will surely be reunified, and all Chinese on both sides of the Taiwan Strait should be bound by a common sense of purpose and share in the glory of the rejuvenation of the Chinese nation.”

Last year, Xi had previously limited himself to saying that the people on both sides of the Taiwan Strait were part of the same family. The new wording increases the pressure on Taiwan and its political leadership. Beijing has also tried to influence the elections in Taiwan with “a savvy disinformation offensive” to undermine the Taiwanese political system, as well as transgressions over the line of demarcation in the Taiwan Strait with ships and aircraft and cyber-attacks against the island’s infrastructure.

If the DPP candidate succeeds, it is likely that pressure from Beijing will increase in the period between the election on January 13th and the inauguration of the president scheduled for May 20th  to deter the slightest pro-independent policies from entering the political agenda. The situation in the Taiwan Strait will be especially sensitive during this time.

While cross-strait relations have always been complicated due to the unresolved “one China” problem, Beijing’s assertive actions have increased tensions to the point where they hold the potential for a geopolitical conflict that could lead to a full-fledged war between the US and China.

Escalation would resonate far beyond the region: Taiwan is the global chip manufacturing powerhouse. 60 percent of semiconductors worldwide and over 90 percent of the most advanced chips are produced in Taiwan, most of them by a single company: Taiwan Semiconductor Manufacturing Company (TSMC). And roughly 90 percent of the largest container ships that are vital for global trade transit through the Taiwan Strait.

As Beijing’s „one China“ policy is a key geopolitical issue that makes relations with Taiwan extremely complicated for the EU and other key players, it is important to briefly look into the origin and historical development.

The “one China” problem in a nutshell

After the Nationalist government under the Kuomintang (KMT) was defeated by the Communists at the end of the Chinese Civil War (1945-1949), Chiang Kai-shek and his troops fled the mainland and moved the Republic of China (ROC) to Taiwan, in what was supposed to be provisional move.

The Chinese Communist Party (CCP) under Mao Zedong then founded the People’s Republic of China on the mainland. Both sides proclaimed that there was but one China and claimed legal representation for themselves.

Until 1971, the ROC was internationally accepted as the representative of China,  most importantly marked by occupying the Chinese permanent seat in the UN Security Council. Resolution 2758 of October 1971 switched official UN representation from the ROC to the PRC.

The PRC under its “one China” principle (yige Zhongguo yuanze) marked Taiwan as its renegade province and “an inseparable part of China.” Until 1991, the ROC government, too, saw Taiwan as part of China’s territory to underline its claim over the mainland. Therefore, countries could not establish diplomatic relations with the PRC and the ROC at the same time.

This brought about a surge of countries switching their official diplomatic relations from Taiwan to the mainland starting in the 1970s. The EU’s predecessor, the European Economic Community, did so in 1975, and the U.S. as an international key player followed suit in 1979, following the historic China visits of Henry Kissinger and President Richard Nixon. At present, only 13 countries still have official ties with the ROC.

This does not mean, however, that all other countries automatically adhere to the PRC’s “one China” principle. Instead, a large number of international key players, such as the US, EU, Japan and Germany pursue a “one China” policy (yige Zhongguo zhengce), i.e. maintaining official diplomatic relations solely with the PRC, while at the same time fostering ties with democratic Taiwan in all areas possible.

Peaceful “reunification” increasingly unlikely

These efforts become even more important in bolstering the internationally important status quo in the Taiwan Strait, as a more assertive China continues to more and more aggressively use the above-mentioned grey zone tactics, to try to intimidate Taiwan and its allies.

At the heart of these increasing cross-strait tensions lies Taiwan’s democratization process. Since the late 1980s, the small island has progressed successfully from a military dictatorship to one of Asia’s most vibrant democracies, holding its first free parliamentary and presidential elections in 1992 and 1996, respectively. In 2000, the historic victory of DPP candidate Chen Shui-bian led to the first peaceful power transition in the island’s political system.

Currently, Taiwan’s political transformation ranks 3rd in the (BTI) (China: 116), which analyzes 137 developing and emerging countries in their progress towards a market economy and constitutional democracy. These developments have led to an increasing deterioration of relations between Taiwan and the mainland. The Chinese government has repeatedly accused the DPP of preventing peaceful reunification and fueling tensions in the Taiwan Strait.

It is important to acknowledge, though, that Taiwan’s social, political, economic, and even cultural development has been greatly diverging from that of mainland China over time, turning the two into de facto different countries and societies. Given the developments in Hong Kong, even a reunification by the formula “one country, two systems”, which is preferred by the PRC, appears to be nothing but a hollow promise from a Taiwanese perspective.

A non-violent resolution of the “one China” problem is becoming less likely, even if the more China-friendly KMT wins the elections. Therefore, Taiwan’s new leaders will likely continue to be confronted with the People’s Republic’s coercive grey-zone tactics.

 

chart: PLA Aircraft Violating Taiwan's De-Facto ADIZ by Month

Keep the status quo and carry on: implications for the EU

What is the EU’s role in all of this? As things stand, member states are still far away from establishing a strong and united stance. This has been aptly illustrated by French President Macron, who stated in an interview just after his visit to mainland China in Spring 2023 that the EU should avoid being “dragged into crises which are not ours” by blindly following the US and instead trace its own path regarding Taiwan. Not only is this statement, ironically, reminiscent of the PRC’s line considering Taiwan an “internal issue”; it also vastly underestimates the EU’s stakes.

chart: EU visits to Taiwan

Given the enormous economic fallout an escalation in the Taiwan Strait would have, and, just as importantly, the EU’s commitment to promoting and protecting a peaceful international order, the EU should carefully consider the implications of these developments for its own policies.

Under the umbrella of its “one China” policy, and short of establishing official diplomatic relations, it still has considerable leeway to engage with Taiwanese authorities and society. This freedom is underlined by a strong increase in official visits to Taiwan in recent years: In 2022 and 2023, government members from Poland, Lithuania, Germany and Slovakia visited the island.

The EU should continue to strengthen relations with Taiwan in all areas possible (e.g. trade and investment, education, culture) and support the island’s participation in international organizations (e.g. WHO), while at the same time firmly maintaining its “one China” policy.

At the same time, the EU should also stay realistic in this regard: The Taiwan issue is at the “core of China’s core interests”, and Beijing’s red lines keep becoming more restrictive. If they are trespassed from a Chinese perspective (like in the case of Lithuania), there will be immediate and palpable consequences. No anti-coercion instrument in the world will deter China from doing so. While cultivating its relations with Taiwan, the EU also needs to prepare for possible reactions from the mainland.

About the authors

Etienne Höra is a project manager in the ‘Europe’s Future’ programme at Bertelsmann Stiftung. His focus lies on the EU’s trade policy in this geoeconomic age, as well as the consequences of China’s increasing assertiveness for the EU.

Cora Jungbluth is a senior expert in the Europe’s Future Program at the Bertelsmann Stiftung. Her research focus is on China, foreign direct investment and international trade (especially the role of emerging economies).

Peter Walkenhorst is Senior Project Manager in Bertelsmann Stiftung’s Europe’s Future Program, where he works on transatlantic relations and European-Chinese relations. Previously, he was a member of the foundation’s Germany and Asia Program, responsible for projects on the systemic conflict with China and social cohesion in Asia.

Read more about EU China Relations

China-Taiwan Conflict: Time to Reduce Risks (globaleurope.eu)

The Curious Case of Taiwan: Will the EU get its Chips Together? (globaleurope.eu)

The Crisis in the Taiwan Strait: Another Slap in the Face for Globalization (globaleurope.eu)

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