Global Affairs Session 81 20 August 2026

CHINA AND TAIWAN: THE SIMMERING VOLCANO

The unfinished legacy of the Chinese Civil War

China–Taiwan tensions are rooted in the unresolved division created in 1949. Beijing seeks reunification and reserves the use of force, while Taiwan functions as a self-governing democracy. Military pressure, defence preparations, American support, semiconductor dependence and great-power rivalry keep the Taiwan Strait exposed to coercion, blockade pressure, miscalculation and sudden escalation.

Simmering volcano How the dispute began One China principle and policy What both sides want Why Taiwan matters Military confrontation Current situation What next

China versus Taiwan – a simmering volcano

China–Taiwan tensions are the unfinished legacy of the Chinese Civil War. Since 1949, the People’s Republic of China (PRC) has governed the mainland while the Republic of China (RoC) has governed Taiwan.

Beijing considers Taiwan part of China and seeks reunification, preferably peacefully, while reserving the use of force. Taiwan is a self-governing democracy whose government says its future must be decided by its 23 million people.

The dispute is intensified by Chinese military pressure, Taiwan’s defence preparations, American security support, semiconductor dependence, and great-power rivalry. The danger is less constant war than persistent coercion, miscalculation, blockade pressure, or sudden escalation.

How the dispute began

1. Taiwan has a complicated historical inheritance. Qing China ceded Taiwan to Japan in 1895. Japan ruled the island until its defeat in the Second World War in 1945, after which Taiwan came under the administration of the Republic of China, or ROC.
2. The decisive break came with the Chinese Civil War. In 1949, Mao Zedong's Communist forces established the People's Republic of China - PRC on the mainland. Chiang Kai-shek's Nationalist government retreated to Taiwan and continued to call itself the Republic of China - ROC.
3. Thus, from 1949 onward, two governments existed across the Taiwan Strait. The PRC controlled mainland China; the ROC controlled Taiwan and several smaller islands. Importantly, the PRC has never governed Taiwan since its establishment in 1949.
4. For many years, the ROC held China's seat at the United Nations. In 1971, UN General Assembly Resolution 2758 transferred China's representation at the UN to the PRC and expelled Chiang Kai-shek's representatives. The resolution itself did not explicitly determine Taiwan's territorial status.
5. In 1979, the United States switched diplomatic recognition from Taipei to Beijing. However, Washington simultaneously created a framework for continuing unofficial relations with Taiwan through the Taiwan Relations Act, including support for Taiwan's ability to defend itself.

One China Principle (and Policy)

1. Recognition of a Single China: It is the diplomatic stance acknowledging that there is only one sovereign state under the name of "China," rather than two separate nations.
2. Difference in Interpretation: While Beijing’s "One-China Principle" asserts that Taiwan is an inalienable part of the People's Republic of China (PRC), countries like the United States follow a "One-China Policy," which recognizes the PRC as the sole legal government of China while only acknowledging (without officially endorsing) Beijing's claim over Taiwan.
3. Diplomatic Impact: Under this framework, countries maintaining official diplomatic ties with Beijing do not have formal embassies in Taiwan, instead engaging with Taipei through robust unofficial, economic, cultural, and defense relationships.
4. India’s stand: In 1950, India was among the first to officially recognize the PRC and for decades, explicitly endorsed the "One China" policy in joint bilateral communiqués. But in 2010, it stopped explicitly mentioning the "One China" policy in official joint documents due to Beijing’s issuing "stapled visas" to Indian citizens from Jammu & Kashmir and raising disputes over Arunachal Pradesh.
5. India carefully calibrated “One China” position: It recognizes the People’s Republic of China and does not maintain formal diplomatic relations with Taiwan.

What China and Taiwan actually want

1. Beijing's position is uncompromising on sovereignty: there is only one China, Taiwan is part of China, and eventual reunification is a national objective. China continues to propose “peaceful reunification” under “one country, two systems.”
2. At the same time, Beijing does not renounce the use of force. Chinese officials say force remains an option particularly if Taiwan moves toward formal independence or if external powers intervene against reunification.
3. Taiwan, however, already functions separately in virtually every practical sense. It has its own elected government, armed forces, currency, passport, laws, taxation system and institutions.
4. President Lai Ching-te, who took office on May 20, 2024, argues that Taiwan's future must be determined by its approximately 23 million people. His government describes the Republic of China, Taiwan, as sovereign and rejects Beijing's claim of authority over it.
5. The political difficulty is that formal independence and the present status quo are not the same thing. Taiwan already governs itself, but a formal declaration creating a new “Republic of Taiwan” could cross one of Beijing's clearest red lines. Consequently, much Taiwanese politics has revolved around protecting autonomy without triggering war.

Why Taiwan matters to everyone

1. Geography makes Taiwan strategically crucial. It sits between Japan and the Philippines along the so-called first island chain, facing China's southeastern coast. Control of the surrounding waters affects access between the Chinese mainland and the wider Pacific.
2. Taiwan is central to the semiconductor economy. Taiwanese companies occupy a critical position in global advanced-chip manufacturing, meaning a serious conflict could disrupt electronics, artificial intelligence, telecommunications, automobiles and defence industries worldwide.
3. The Taiwan Strait and nearby seas form part of one of the world's most economically important maritime regions. A military confrontation or prolonged blockade could therefore produce consequences far beyond China and Taiwan.
4. For the United States, Taiwan is tied to the larger question of the Asian balance of power. Washington has no formal defence treaty with Taiwan, but it remains Taiwan's most important military supplier and maintains extensive unofficial relations.
5. For Japan, the Philippines and other regional states, a Taiwan conflict could transform their own security environment. Therefore, Taiwan is no longer merely a Chinese civil-war legacy; it has become one of the central strategic questions of the Indo-Pacific.

From political dispute to military confrontation

1. For decades, both sides generally avoided direct military confrontation, but the Strait has repeatedly experienced crises. One major turning point came during the 1995–96 Taiwan Strait Crisis, when China conducted missile tests and military exercises around Taiwan.
2. In 2005, China adopted its Anti-Secession Law, giving a domestic legal framework for the possible use of “non-peaceful means” if Beijing concludes that possibilities for peaceful reunification have been exhausted.
3. Relations deteriorated further after Tsai Ing-wen became president in 2016. Beijing distrusted her Democratic Progressive Party's position on Taiwanese identity and suspended important channels of cross-Strait political communication.
4. Another major escalation followed U.S. House Speaker Nancy Pelosi's visit to Taiwan in August 2022. China responded with unprecedented military exercises around the island, helping establish a more intense pattern of PLA operations close to Taiwan.
5. Since Lai Ching-te's presidency began in 2024, military aircraft, naval deployments, coast-guard operations, cyber activity, disinformation and major exercises have formed what analysts often describe as grey-zone pressure - coercion below the threshold of declared war.

Current situation – Volcano getting hotter

1. Chinese military pressure remains frequent. Beijing continues to use aircraft, warships, exercises and maritime operations to demonstrate that it can surround, isolate or pressure Taiwan without necessarily launching an immediate invasion. China also conducted live-fire exercises in parts of the Taiwan Strait in July 2026.
2. Taiwan increasingly worries that a routine Chinese exercise could suddenly become the opening phase of a genuine attack. Its military therefore trains for rapid transitions from peacetime monitoring to full combat readiness.
3. During the August 2026 Han Kuang exercises, Taiwan practised breaking a possible maritime blockade, escorting merchant vessels, maintaining communications during internet disruption, protecting infrastructure and sustaining military production under attack.
4. Taiwan is consequently spending much more on defence. On 20 August 2026, its government proposed an 18% increase in the 2027 defence budget to a record NT$1.1225 trillion, pushing expenditure above 3% of GDP, with emphasis on capabilities including drones, missiles and submarines. The proposal still requires legislative approval.
5. The American factor remains crucial but also introduces uncertainty. The United States continues to support Taiwan's self-defence, while debate has surrounded further weapons packages. In 2026, a prospective package of up to $14 billion became part of wider discussion over Washington's China policy, although senior U.S. officials maintained that Taiwan arms decisions were not dependent on Beijing's approval.

What next

1. The most likely near-term outcome remains an uneasy status quo. China pressures Taiwan; Taiwan strengthens deterrence; Washington supports Taipei without recognizing it diplomatically as a separate state; and all parties attempt to avoid crossing the final threshold into war.
2. Grey-zone coercion could intensify. Instead of invading, China can use aircraft, ships, coast-guard vessels, cyber operations, economic restrictions, information warfare and selective exercises to wear down Taiwan and normalize Chinese presence around it.
3. A blockade or quarantine may be more plausible than an immediate amphibious invasion. Beijing could attempt inspections, exclusion zones or maritime restrictions designed to pressure Taiwan while forcing Washington and regional governments to decide whether and how to intervene. Taiwan's 2026 exercises explicitly trained against blockade scenarios.
4. A full-scale invasion would be enormously risky. Crossing the Taiwan Strait, securing landing areas, sustaining forces and fighting across densely populated terrain would constitute one of the world's most demanding military operations. It could also trigger wider regional intervention and massive economic disruption.
5. The biggest danger may therefore be miscalculation rather than a deliberately scheduled war: an aircraft collision, naval confrontation, blockade that escalates, political declaration interpreted as a red line, or military exercise misunderstood as preparation for attack. This is why reliable crisis communication and restraint are so important.

Value addition

Glossary and related terms

People’s Republic of China (PRC)

The state established by the Chinese Communist Party on the mainland in 1949.

Republic of China (ROC)

The government that retreated to Taiwan in 1949 and continues as Taiwan’s formal constitutional name.

Taiwan Strait

The body of water separating Taiwan from mainland China and a central arena of cross-Strait military and political tension.

Cross-Strait relations

Political, economic, social and security relations between the authorities in mainland China and Taiwan.

UN General Assembly Resolution 2758

The 1971 resolution that transferred China’s representation at the United Nations from the ROC representatives to the PRC.

Taiwan Relations Act

The 1979 United States legal framework for unofficial relations with Taiwan and support for its ability to defend itself.

One-China Principle

Beijing’s position that there is one China, Taiwan is part of it, and the PRC is the sole legal government representing China.

One-China Policy

A country-specific diplomatic approach that recognizes the PRC while acknowledging, without necessarily endorsing, Beijing’s claim over Taiwan.

One country, two systems

Beijing’s proposed framework under which Taiwan would reunify with China while retaining a distinct system under defined conditions.

First island chain

The arc of islands running through Japan, Taiwan and the Philippines that shapes access between the Asian mainland and the wider Pacific.

Anti-Secession Law

China’s 2005 law providing a domestic legal basis for possible non-peaceful action if Beijing judges that peaceful reunification has become impossible.

People’s Liberation Army (PLA)

The armed forces of the People’s Republic of China.

Grey-zone pressure

Coercive activity below the threshold of declared war, including military patrols, coast-guard operations, cyber activity, disinformation and selective exercises.

Han Kuang exercises

Taiwan’s major defence exercises, used to practise responses to invasion, blockade, infrastructure disruption and other contingencies.

Blockade

An effort to prevent vessels, aircraft, goods or supplies from reaching or leaving a territory through military or coercive control.

Quarantine

A more limited maritime-control arrangement involving inspections, exclusion zones or restrictions that may be presented as law enforcement rather than open warfare.

Deterrence

Discouraging an opponent from acting by convincing it that the likely costs and risks will outweigh the expected gains.

Semiconductor dependence

The global reliance on Taiwanese firms for significant portions of advanced-chip manufacturing and related technology supply chains.

Value addition

Conceptual references

• The Chinese Civil War and the emergence of separate PRC and ROC governments after 1949.
• UN General Assembly Resolution 2758 and the distinction between representation at the United Nations and Taiwan’s territorial status.
• The United States’ 1979 recognition switch and the Taiwan Relations Act framework for continuing unofficial relations.
• The distinction between Beijing’s One-China Principle and the One-China policies followed by other governments.
• The first island chain, the Taiwan Strait and the wider Indo-Pacific balance of power.
• Taiwan’s role in advanced-semiconductor manufacturing and the global economic consequences of disruption.
• The Anti-Secession Law, cross-Strait crises, grey-zone coercion and the risks of blockade or military miscalculation.
• Deterrence, crisis communication and preservation of the uneasy cross-Strait status quo.