Nancy Pelosi’s unexpected visit to Taiwan on August 2-3 and the immediate reaction of China’s People’s Liberation Army represents the worst crisis across the Taiwan Strait since 1995. Pelosi is the highest-ranking US representative to visit Taipei since 1997, when the then US Speaker of the House Newt Gingrich visited the island. A leak about Pelosi’s Asian itinerary caused a preventive debate and accusations from China, which led to a video call between Joe Biden and Xi Jinping to (partially) smooth over tensions. However, it is still unclear how much information President Biden shared about Nancy Pelosi’s trip, given that on three occasions over the past year he has inadvertently cast doubt upon the persistence of Washington’s so-called “strategic ambiguity” over Taiwan’s military defense. This latest crisis is yet another indication that China-US relations are bound to deteriorate further. Has the crisis changed the status quo over Taiwan? How has it impacted the already fraught dynamics within the region’s strategic landscape?
Why it matters
- The bar is high. Pelosi is the highest-ranking US official to visit Taiwan in decades and the PRC’s reaction can be interpreted as one step closer to a full-out military attack or invasion. Any other future provocation will come dangerously close to the point of no return. The result is that the already precarious balance across the Taiwan Strait is all the more unstable and any incident that might lead to a confrontation could be looming around the corner. Moreover, Pelosi’s visit has triggered a series of reactions and counterreactions that might last indefinitely, as demonstrated by the transit of two US warships through the Taiwan Strait on August the 27th. The highly sensitive upcoming political season – mid-term elections in the US and the Party Congress in China (starting from October the 16th) are close – might offer further occasions for confrontation between Washington and Beijing over Taiwan.
- The radicalized are on fire. The worst outcome of this crisis is that the most radicalized voices over the US-China relationship have been galvanized both in Beijing and Washington. Three additional US delegations have followed Pelosi’s trip: a delegation of five lawmakers on August the 14th, then Indiana Governor, Eric Holcomb, and state commerce officials on August the 22nd before Senator Marsha Blackburn’s visit on August the 25th. Paying a visit to Taipei is becoming the easiest way to show opposition to the PRC’s policies with no regard for the ongoing talks between US and Chinese officials. On the other side, on August the 10th, the Chinese Government published a White Paper on Taiwan stating that complete unification is a historic mission, listing the use of force as a last resort under compelling circumstances.
- India’s and South Korea’s ambiguous stances. Pelosi’s visit was a good opportunity to get more insight into the region’s balance of power. The ”who supported whom” angle unveiled China’s relative strength – as well as the US’ – in the region. The two most interesting and unexpected reactions came from Seoul and New Delhi. The newly elected South Korean President, Yoon Suk-yeol, was said in the last month to have tilted towards the US, following his attendance at the NATO Summit in Madrid. However, he failed to meet Nancy Pelosi during her visit to Seoul after Taiwan. Officially, the President was on holiday, though it is more likely that his administration thought it more cautious to avoid a meeting, considering it could strain relations with China. Meanwhile, India’s immediate reaction was that of a studied silence at first. Only days later a criticism followed against China’s militarization of the Taiwan Strait and for its unilateral actions, which might change the status quo. India is still stuck in the middle between the US and China (and Russia’s) power struggle. On the one hand, New Delhi criticizes Bejing and is a pivotal actor in the US’ Indo-Pacific strategy. On the other hand, it runs its own foreign policy, enjoying its role as a BRICS member and sending troops to Russian military exercises in Vostok.
Taiwan is the most visible point of contention between the US and China, and it will be a source of instability in the coming years, due to its high recognizability for public opinion in both countries. The debate over Taiwan’s status also offers a unique symbolism of a free China vis-a-vis a communist China or – in Beijing’s view – of a mutilated province to be reunified with the motherland, completing China’s rise and concluding its long-term humiliation over the loss of national sovereignty. The Taiwan issue will become an easy target of identity claims for both Chinese and US foreign policies. An accelerated buildup of regional coalitions – along the values of a free and open Indo-Pacific and anti-American imperialism and interference – is a likely outcome. However, regional powers might be unwilling to cooperate with partners to preserve their own economic interests, ultimately undermining trust within regional alliances.
In the spotlight
The relationship between China and the Solomon Islands is once again under scrutiny. The Solomon Islands started diplomatic ties with Beijing only in 2019, after cutting decades-long ties with Taiwan. Last April, the tiny archipelago and China signed a security pact that has been highly criticized by Australia and the US, due to mounting fears over the creation of a Chinese military base in the area. Since then, several events have revealed the tightening relationship between Beijing and Honiara. First, a loan from the Chinese Exim Bank will allow the Solomon Islands to pay for the construction of 161 mobile communication towers by Huawei. Moreover, the Australian broadcast ABC accused the government in Honiara to reward the lawmakers that supported the current Prime Minister Sogavare with money from a Chinese fund, an accusation that prompted the archipelago’s government to enforce stricter control over the media. Finally, on August 23 a US Coast Guard vessel was denied to stop in Honiara to refuel and resupply, causing harsh disappointment and criticism from U.S. authorities.
After Speaker Nancy Pelosi’s trip, members of the U.S. Congress successively traveled to Taipei. Not only the legislative branch but also the Biden Administration articulates a supportive position toward Taiwan and negotiations for a bilateral trade agreement are expected to commence this fall. In accordance with recent Washington’s gestures, Tokyo maintains a pro-Taiwan position. Japanese Prime Minister Fumio Kishida welcomed Pelosi and discussed the significance of peace and stability across the Taiwan Strait. Members of the Japanese Diet also visited Taipei to meet President Tsai Ing-wen. Judging by their concrete actions following Pelosi’s Asian tour, the U.S. and Japan are likely to accelerate their policies to support Taiwan. After the visit, during China’s military exercises around Taiwan, five ballistic missiles from China landed in Japan’s Exclusive Economic Zone. The fact Chinese fighter jets frequently fly across the median line on the Strait, the de facto sea border between China and Taiwan, shows that Beijing’s efforts to erode the status quo and challenge the liberal international order will continue.
Masatoshi Murakami, Kogakkan University
Representative Nancy Pelosi’s visit to Taiwan is important for what it was and what it wasn’t. It did raise tensions between the United States and China, sparking a military demonstration of China’s power in the region cutting off vital lines of communication between the two great powers. What it did not do was change in any fundamental way the U.S. application of its one China policy: the United States continues to recognize only the government in Beijing and has not altered its ambiguous approach to the future of Taiwan. Though the potential for misunderstanding in the Taiwan Strait is higher, the incentives to prevent all-out war from damaging the status quo remain in place on all sides.
What and Where
Pakistan's new PM faces an environmental catastrophe
Pakistan is not new to political instability. Nonetheless, compounded by an environmental crisis, the consequences on the population could be disastrous. Former Prime Minister Imran Khan – chief of the Pakistan Tehreek-e-Insaf (PTI) – was ousted on April the 10th with a no-confidence vote in Parliament based on weak economic performance under his mandate and tense relations with the country’s military. The interim Prime Minister, Shehbaz Sharif, will not have an easy time: the economy is struggling, and a climate catastrophe is destroying parts of the country. The monsoon season this August has been brutal, with floods that caused a thousand deaths and forced many to abandon their homes. According to the Pakistani Climate Change Minister, around 30 million people – amounting to 15% of Pakistan’s population – have been hit. Pakistan’s government had to cut its spending budget to access the IMF’s bailout funds and avoid economic collapse. Although a 1,1 bn bailout package was approved, the government will hardly be able to afford reconstruction or support the totality of the population in need. Prime Minister Sharif has called for rapid international aid, but whether more help will come swiftly is yet to be seen.
Yoon Suk-yeol’s ambitious plan for North Korea’s denuclearisation
Yoon Suk-yeol, South Korea’s new President, has recently celebrated his first 100 days in office. So far, his “audacious initiative” to push North Korea towards denuclearisation has been Yoon’s most ambitious project. During his electoral campaign, Yoon had already stated his hard stance on North Korea, advocating for the complete denuclearisation of the peninsula and for increased military cooperation with the US. On August the 15th – the celebration of South Korea's 77th Liberation Day from Japanese rule – Yoon’s address outlined an audacious initiative: North Korea's denuclearisation in exchange for South Korea’s economic support and development investments. It is not the first time that economic cooperation has been proposed in exchange for the country’s denuclearisation, though Pyongyang has never accepted to renounce its nuclear arsenal. If anything, North Korea quickly and unequivocally rejected Yoon's offer, as declared in a statement on state-controlled media, KCNA, by Kim Yo Jong, Kim Jong-un's sister. She derided the initiative as an “absurd dream”, spotlighting the request’s irony given that North Korea is asked to denuclearize while Seoul is planning military exercises with the US against Pyongyang.
China’s economy hit by the real estate crisis
China’s growth projections in the IMF’s World Economic Outlook for 2022 and 2023 have lowered. The causes of the economic slowdown are the stiff Covid restrictions of the past months, which have damaged economic activities and reduced domestic consumption, and the country’s real estate crisis. Indeed, the housing market in China is at a critical juncture: once dynamic and remunerative, the property market has experienced a 40% fall in sales this year alone. People are losing confidence in the housing sector, which in turn affects domestic consumption. An additional problem of the real estate market in China is the fact that many buildings and apartments have been presold – accounting for 70%-80% of home sales in the country. Builders sold the houses before they were completed, with homebuyers taking out loans to afford the purchase. With real estate market confidence diminishing and revenues declining, many builders have not had the economic means to complete the houses. This has caused local financial woes as many homebuyers are refusing to repay loans for unfinished houses. In Zhengzhou, for example, many buyers have threatened to stop repaying the banks. Beijing has laid down measures in the past months to soften the economic impact of the real estate crisis by reducing borrowing costs for homebuyers and increasing funds for infrastructure projects. -The most recent ones, announced on August 24th, laid out 300 billion yuan for infrastructure; however, the government has so far avoided to bail out the real estate sector.
Thailand’s government in turmoil
Thailand’s Constitutional Court has suspended Prime Minister and retired army official Prayuth Chan-o-cha, effective as of August the 24th, while it deliberates whether he has infringed upon the 8-year term limit set out by the Constitution. Chan-o-cha first took power through a military coup in 2014, later winning the controversial 2019 election. Ironically, Chan-o-cha himself who adopted the new constitution in 2017, which set the 8-year term limit. The opposition has accused Chan-o-cha of exceeding his time in office – as he officially took power in 2014 – and presented a petition to the Court. For now, the former Prime Minister has been demoted to Defence Minister, while the position of deputy Prime Minister is currently held by Prawit Wongsuwan, a former army chief. The court will have to decide whether Cha-o-cha must permanently step down from his role as PM. In that scenario, we can expect an anticipated election in November or an interim government until the regularly scheduled election (set for 2023). However, given Thailand's tumultuous political past, predictions are hard to make as military coups and incensed protests have been the norm over the past decades.
Looking ahead: Water stress and risks of flooding in Asia
This summer, China has experienced its most severe drought in decades. This scenario is likely to become the standard, since the whole region faces high water stress levels. In particular, China, India, and Japan are second only to Central Asian and MENA countries on this issue. Crucially, however, the biggest urban areas in Northeast China and Western India are the most at risk on a global scale. Although Southeast Asia does not face similar water stress scenarios, coastal flooding as a by-product of climate change looks increasingly likely in this region. According to figures from Climate Central, by 2100 Asia will be by far the region most exposed to coastal flooding due to global warming, putting 146.5 million people at risk. In comparison, the second continent most at risk is Europe, where 16.9 million would be at risk of regular flooding, half of whom in the Netherlands.