THE TAIWAN STORY | WHY XI JINPING WARNED TRUMP

Global Affairs Session 37 15 May 2026

THE TAIWAN QUESTION

Taiwan and the question of "One China"

Taiwan is one island claimed by two governments, and it sits at the centre of the world's most dangerous flashpoint. The Republic of China and the People's Republic of China each trace a rival claim back to 1949, Taiwan has turned itself into an indispensable semiconductor economy, and Washington's stake in its fate now shapes the entire US-China relationship.

How Taiwan came into being Why the PRC claims Taiwan Taiwan's economic history Major incidents since 1949 Taiwan's political system America's interest in Taiwan

How Taiwan (ROC) came into being

The Republic of China was founded in 1912 after the fall of the Qing dynasty and originally controlled the full Chinese mainland. Taiwan came under the ROC only in 1949, once the Kuomintang lost the civil war and the Chinese Communist Party took over the mainland.

• The Republic of China was founded in 1912 after the fall of the Qing dynasty; it originally governed mainland China, not just Taiwan.
• Taiwan had been under Japanese rule from 1895 to 1945, after Qing China ceded it to Japan following the First Sino-Japanese War.
• After Japan's defeat in World War II, Taiwan came under ROC administration in 1945, a moment still politically interpreted differently by Beijing, Taipei, and many historians.
• The Chinese Civil War ended with two rival governments: Mao Zedong's Communist Party founded the People's Republic of China in Beijing on October 1, 1949, while Chiang Kai-shek's Nationalist/KMT government retreated to Taiwan.
• Since 1949, the ROC government has exercised actual jurisdiction over Taiwan, Penghu, Kinmen, Matsu, and nearby islands, while no longer controlling mainland China.

Why the PRC claims ROC / Taiwan as its own

Both the PRC and the ROC make claims that contradict each other, and countries of the world carefully balance the two, from time to time.

• The PRC argues that there is only one China, that the PRC is the sole legitimate government of China, and that Taiwan is part of China.
• Beijing says Taiwan has belonged to China historically and legally, citing Qing-era rule, Japan's surrender in 1945, and postwar arrangements.
• The PRC sees the ROC government on Taiwan as a remnant of the Chinese Civil War, not as a separate sovereign country.
• China's 2005 Anti-Secession Law says Taiwan is part of China and gives Beijing a legal basis, in PRC law, to oppose formal Taiwanese independence.
• Beijing considers reunification a core national goal and has repeatedly said it prefers peaceful reunification but will not renounce force if it sees Taiwan moving toward permanent separation.

China's "One China Principle" means Taiwan is part of China, and the PRC is the only legitimate government of China; Beijing treats this as non-negotiable. Taiwan's older KMT-era position held a different "one China" — that there is one China, but the Republic of China is the legitimate one.

• Most countries maintain official diplomatic relations with Beijing because the PRC is a major power and insists that countries cannot have formal diplomatic ties with both Beijing and Taipei. Most therefore keep official embassies with the PRC, unofficial trade or cultural offices with Taiwan, and no formal recognition of Taiwan as an independent country.
• Taiwan is self-governing in practice. It has its own president, elections, military, currency, passport, courts, and laws.
• Because of the One China framework, Taiwan is excluded from many international organizations or participates only under special names such as "Chinese Taipei." Taiwan's foreign ministry argues that UN Resolution 2758 did not decide Taiwan's sovereignty and did not make Taiwan part of the PRC.

Taiwan's economic history

Taiwan (ROC) moved from being an agricultural society to a high-tech manufacturing success, an Asian Tiger success story. Today, the world-leading TSMC is a role model for that transformation.

• 1950s: Taiwan began as a relatively poor, agrarian economy, supported by land reforms, US aid, and state-led development.
• 1960s–1980s: Taiwan industrialized rapidly through export-oriented manufacturing — textiles, plastics, electronics, machinery — and became one of the "Four Asian Tigers."
• 1980s–2000s: The economy shifted from low-cost manufacturing toward technology, electronics, precision manufacturing, and global supply chains.
• 2000s–2020s: Taiwan became a world leader in semiconductors, with TSMC and the broader chip ecosystem becoming central to its prosperity and geopolitical importance.
• Today: Taiwan is a high-income, advanced industrial economy, but it faces risks — dependence on semiconductors, an aging population, energy security, cross-strait tension, and exposure to global tech cycles. Taiwan's official statistics reported very strong 2025 growth, driven heavily by tech and AI-related demand.

Major incidents and events from 1949 till date

Taiwan has been a self-governed territory for a long time now, and the PRC has been antagonistic towards it. It remains a dangerous flashpoint.

• 1949–1950: The KMT/ROC government moved to Taiwan after losing the mainland; the PRC was established in Beijing.
• 1954–55 and 1958 Taiwan Strait Crises: The PRC shelled offshore islands such as Quemoy/Kinmen and Matsu; the US backed Taiwan during Cold War confrontation.
• 1971–1979 diplomatic shift: The ROC lost the China seat at the UN in 1971; in 1979, the US recognized the PRC diplomatically but passed the Taiwan Relations Act to maintain unofficial ties with Taiwan.
• 1987–1996 democratization and missile crisis: Martial law ended in 1987; Taiwan moved toward competitive democracy; the 1995–96 missile crisis occurred as China fired missiles near Taiwan before Taiwan's first direct presidential election.
• 2016–2026 renewed tensions: Tsai Ing-wen's presidency from 2016, Nancy Pelosi's 2022 Taiwan visit, repeated PLA military drills, Lai Ching-te's 2024 election, and continuing US-China friction have kept Taiwan one of the world's most dangerous flashpoints.

Taiwan's political system

Taiwan was a one-party martial law system until 1987, when democracy was ushered in, and it still remains in practice. It is now a multi-party semi-Presidential democracy.

• 1949–1987: Taiwan was under KMT one-party dominance and martial law; opposition politics were heavily restricted. The ROC constitution formally continued, but during the Cold War period Taiwan functioned as an authoritarian anti-communist state under Chiang Kai-shek and later Chiang Ching-kuo.
• 1987: Martial law was lifted, opening the way for opposition parties, freer media, civil society, and constitutional reforms.
• 1996: Taiwan held its first direct presidential election, becoming a full electoral democracy.
• Today, Taiwan is a multi-party semi-presidential democracy with a directly elected president, premier, cabinet, legislature, judiciary, and regular competitive elections. Lai Ching-te of the DPP became president on May 20, 2024; the 2024 legislature produced a minority-government situation.

America's interest in Taiwan

Given its immense geographic importance, America is not willing to dump Taiwan to China's machinations. But will it risk a war? Time will tell.

• Strategic geography: Taiwan sits in the first island chain, close to Japan, the Philippines, and key Pacific sea routes.
• Containment and balance of power: During the Cold War, Taiwan was an anti-communist ally; today it is central to the US-China strategic rivalry.
• Democracy and credibility: Taiwan is a successful Asian democracy, and US support is tied to America's image as a defender of democratic partners.
• Security commitment without formal alliance: The US does not have official diplomatic relations with Taiwan, but the Taiwan Relations Act says the US will help Taiwan maintain defensive capabilities and regards non-peaceful attempts to determine Taiwan's future as a grave concern.
• Semiconductors: Taiwan is crucial to global chip supply chains, especially through TSMC, making Taiwan important for AI, electronics, defense technology, and global economic security.

Value addition

Glossary and related terms

Republic of China (ROC)

The government founded in 1912 that once ruled mainland China and has governed Taiwan and nearby islands since 1949.

People's Republic of China (PRC)

The government established by the Chinese Communist Party in Beijing on October 1, 1949, after winning the Chinese Civil War.

Kuomintang (KMT)

The Chinese Nationalist Party that governed mainland China before 1949 and then retreated to and ruled Taiwan under martial law until 1987.

One China Principle

Beijing's position that there is only one China, that the PRC is its sole legitimate government, and that Taiwan is part of China.

Anti-Secession Law

A 2005 PRC law declaring Taiwan part of China and providing a legal basis for Beijing to oppose formal Taiwanese independence, including by force if necessary.

Taiwan Relations Act

A 1979 US law that maintains unofficial ties with Taiwan and commits the US to helping Taiwan maintain its defensive capabilities after Washington switched diplomatic recognition to the PRC.

UN Resolution 2758

The 1971 UN resolution that transferred China's UN seat from the ROC to the PRC; Taiwan's government argues it did not determine Taiwan's sovereignty.

Chinese Taipei

The name Taiwan is required to use to participate in many international organizations and events, such as the Olympics, under the One China framework.

Four Asian Tigers

Taiwan, South Korea, Hong Kong and Singapore, the four East Asian economies that industrialized rapidly through export-oriented manufacturing from the 1960s onward.

First island chain

The chain of islands — including Japan, Taiwan and the Philippines — that shapes US and Chinese naval strategy in the Western Pacific.

Cross-strait relations

The political, economic and security relationship between Taiwan and mainland China across the Taiwan Strait.

Semi-presidential democracy

A system, like Taiwan's, combining a directly elected president with a premier and cabinet accountable to the legislature.

Value addition

Conceptual references

• Historical scholarship on the Chinese Civil War, the retreat of the ROC to Taiwan, and postwar cross-strait divergence.
• PRC legal and policy documents underpinning the One China Principle and the 2005 Anti-Secession Law.
• US policy literature on the Taiwan Relations Act, strategic ambiguity, and the first island chain.
• Economic-development literature on the Four Asian Tigers and Taiwan's rise as a semiconductor power.
• Comparative political science on Taiwan's transition from martial law to semi-presidential democracy.