Pelosi’s Trip To Taiwan Is The Climax To Thirty Years Of Chinese Buildup

Nancy Pelosi, the Speaker of the House of Representatives, and more importantly, third-in-command after President Joe Biden and Vice President Kamala Harris, is going to meet Taiwan’s President Tsai Ing-wen later this week, as part of her trip to Eastern Asia that started with Singapore.

Pelosi is the first speaker in 25 years, after Speaker Newt Gingrich made the trip in 1997. However, he was a Republican speaker in a Democratic government, and therefore, drawing political and strategic parallels would be faulty.

The trip puts both Washington DC and Beijing in difficult positions. On Taiwan, both regimes are stuck in what resembles a Mexican standoff, diplomatically not militarily. At stake is President Xi Jinping’s political hold in China and within the Chinese Communist Party (CCP) for reunification with the island nation has been on his agenda for more than a decade now.

For President Joe Biden and many Republican leaders, Pelosi’s visit is about affirming America’s stature on global security and securing the interests of its allies in the region.

However, the buildup to this geopolitical climax has been more than thirty years in the making, starting with the protests in 1989 in the Tiananmen Square, the war in the Gulf in 1990, and the downfall of the Soviet Union in December 1991.

For China, the protests at Tiananmen were about containing the threat to the party's ideology. The swift American victory in the Gulf War was a key lesson to upgrade the military prowess to challenge the West in the future. Finally, the downfall of the Soviet Union was about economically, socially, and politically sustaining its governance while not being coerced into accepting Democracy as many then in the United States wanted.

And thus began the thirty years long buildup. To put things in perspective, in 1994, Taiwan’s military budget was greater than that of China. Today, China outspends Taiwan by 20x. From a gross domestic product (GDP) of around $300 billion in 1980, China today has a GDP of more than $14 trillion, second to the US.

China’s trade with the outside world amounted to $40 billion in 1980. Today, it’s increased to $4 trillion. It’s the largest producer of ships, steel, aluminum, furniture, clothing, textiles, computers, and is now challenging the US in a tech war with separate funding of $1.4 trillion from Beijing itself.

China is displacing the US, once the hub for auto-engineering and consumption. Today, with a population four times that of the US, China is the largest manufacturer and consumer of automobiles. This has a direct impact on its oil consumption, and its investment in renewable energy sources.

Already, China has installed more solar energy than any nation, and between 2008 and 2019 built a high-speed rail system greater than that of all other nations put together. Heck, the Chinese have used more cement between 2011 and 2013 than the US did in the entire twentieth century.

Post-2008 and the Great Recession of our times, China went from blunting American power to aggressively challenging it. The confrontation was not pursued militarily but by way of strategic alliances and investments, especially in Europe, and across the world through the Belt and Road initiative.

While returns on many of these investments are in limbo, they did allow the Chinese to gain a foothold in territories previously influenced by Americans, mainly in Africa. The pandemic was the final nail in the diplomatic coffin.

From the two years of the pandemic and two quarters after the invasion of Ukraine by Russia, one key lesson surfaces; that is the economic priorities supersede everything else. All the fancy talk about holding China or Russia accountable are only relevant until the next cycle of inflation, as evident by the lack of unified response of the West to both the pandemic and the invasion.

For both China and the US, a conflict in the Taiwan strait will only add to their economic woes while plunging the global industry into a supply chain crisis on the semiconductor front. Simply put, there is too much at stake for the economies to engage militarily.

Thus, the $450 billion-odd question remains; that is why everyone in Beijing so rattled. Why does the visit of the Speaker, especially when her party is predicted to be decimated in the midterms a quarter from now, attract so much attention and alarm?

China has bided its time, built its economic and political capacity, upgraded its military strength in the Indo-Pacific region, but has also faltered. For Jinping, the slowing economy and other concerns in the mainland (read about them here, here, here, here, and here) warrant a distraction and that is where Taiwan politically fits.

Also, to have Pelosi make the trip merely a quarter before Jinping secures a life-long term does not make for great optics back home. For China, any move from the West to dilute their claim on Taiwan is a dent to a larger objective that has been in the works for three decades.

For the White House, it is cheaper by a factor of billions to build what they need from Taiwan in the next ten years than to commit defending the island nation for the next fifty, as evident by the CHIPS and Science Act that sets aside $52 billion for the semiconductor industry, so why all the fuss?

Yet, the Americans would want the status-quo to remain for them to prolong their strategic ambiguity. Recently, the White House was quick to retract after Biden declared that the US would militarily intervene if China were to make the move to capture Taiwan.

Committing to a war without an exit strategy, with potential military aggravation in the Korean peninsula, and a huge economic cost is unthinkable for Washington, especially when they have had two consecutive quarters of negative growth and inflation peaking at a 40-year high.

Also, the failure in Afghanistan, the silence on Hong Kong, and the confusion on Ukraine must also be factored in while evaluating a potential response of the US in Taiwan.

According to Biden, the US military believes that Pelosi’s trip is a bad idea, but would the Chinese be foolish enough to start a war over the visit from an 82-year-old leader, in the dusk of her political career, and with her party on its way out, possibly in 2024, or will they play the long game, sit this one out, and contain the response to a few angry outbursts in the Global Times and aggressive patrolling in the strait for the next few weeks?

If the West believes and is worried that Pelosi's visit may trigger a military response from China, rest assured that Taiwan is already lost. Merely a matter of when from here. Either way, Pelosi’s visit will only intensify the Mexican standoff, a diplomatic charade, that is only relevant until the United States acquires semiconductor capacity to hedge its economic play.

Conflict, for now, looks far-fetched, or so one hopes.

Also Read: What If Pelosi Does Indeed Go To Taiwan? And What If She Doesn't?