Why Taiwan Matters

a metal road sign in taipei reads “air raid shelter” in both chinese and english. a few feet away, young professionals crowd into a bubble tea shop, discussing weekend plans. in this paradox lies taiwan’s extraordinary story.

in this chapter, you’ll find out how an island roughly the size of the netherlands became arguably the most strategically significant place on earth. you’ll understand why taiwan’s semiconductor industry makes it a hub of global technology, how its democracy evolved in the shadow of authoritarianism, and what makes its cultural identity unique. and finally, you’ll learn why this island’s future may determine the course of the twenty-first century; not just for asia, but for the world.

in early 2024, smartphones across taiwan suddenly blared with an emergency alert: “air raid alert. missile flyover taiwan airspace. be aware.” yet, in a nearby shop, the owner barely shrugged at the warning, treating it as routine government overcaution. this striking contrast between crisis and calm captures the essence of modern taiwan, where chinese military aircraft breached the island’s airspace 1,727 times in 2022 alone, yet daily life continues with remarkable normality.

this peculiar normalcy exists in a place that most countries treat as a nation while refusing to officially recognize it as one. even the simple matter of passport design reveals this complexity. until 2020, a fierce debate raged over whether the cover should read “republic of china” or “taiwan” – a seemingly bureaucratic issue that cut to the heart of the island’s identity struggle and its complex international status. the debate ultimately resulted in a compromise where both names appear, though “taiwan” is in larger type.

such negotiations over identity reflect a shift in how the island’s people see themselves. recent surveys show that only 3 percent of taiwanese identify as primarily chinese, while 67 percent see themselves as solely taiwanese. the remaining 30 percent identify as both chinese and taiwanese.

the current political status of taiwan stems from the conclusion of the chinese civil war in 1949. the defeated nationalist government fled to taiwan while the victorious communists established control over mainland china. both sides initially claimed to be the legitimate rulers of all china, leading to decades of tension. through the 1970s, politicians like richard nixon and mao zedong carefully constructed a diplomatic framework that recognized only one china while deliberately leaving its precise meaning ambiguous – a diplomatic sleight of hand that helped maintain peace while satisfying neither side completely.

over time, taiwan and china developed along radically different paths. while china embraced authoritarian communism, taiwan gradually evolved toward capitalist democracy. the island carried influences not just from china but from japanese colonial rule and various western powers, creating a cultural mosaic that set it apart from the mainland.

this distinct identity has created a notably pluralistic society. this social cohesion was particularly evident during the covid-19 pandemic when taiwan achieved one of the world’s most successful responses without imposing lockdowns. instead, the population voluntarily adopted protective measures, reflecting deep-rooted confucian values of social responsibility and a distinctly taiwanese approach to governance.

in 1949, as communist forces closed in on mainland china, curators frantically loaded 40,000 wooden crates of imperial treasures onto ships bound for taiwan. these precious artifacts – jade carvings, bronze vessels, and ancient scrolls – survived a decade-long journey across china and the strait of taiwan. today, these treasures rest in taipei’s national palace museum, drawing visitors from around the world. their presence tells a story: how taiwan became both a preserver of traditional chinese culture and a society that would forge its own distinct path.

that path began long before the museum’s creation. indigenous peoples had inhabited the island of taiwan for over 20,000 years before waves of chinese migration began in the seventeenth century. european traders, particularly the dutch, established outposts in the 1630s, while the chinese qing empire held taiwan as a distant prefecture. japan’s 50-year colonial rule from 1895 to 1945 left lasting influences on everything from architecture to education, creating the first major divergence from mainland chinese society.

the tumultuous aftermath of world war ii transformed taiwan forever. the victorious allies handed the island to china’s nationalist government, without consulting its people, causing tensions to quickly erupt. in the infamous “228 incident” of 1947, nationalist forces brutally suppressed local protests, creating deep scars in taiwanese society. two years later, as communist forces won the chinese civil war, nearly two million mainland chinese fled to taiwan, bringing their own cultural influence to the island. taiwan’s separate existence hung by a thread – until an unexpected savior emerged. north korea’s 1950 invasion of south korea forced china to redirect its military resources, preventing a planned invasion of taiwan.

chiang kai-shek came to power in 1949, establishing authoritarian rule over taiwan. under his leadership, taiwan experienced an economic miracle, while enduring political repression. as japanese electronics companies sought manufacturing partners in the 1960s and ’70s, taiwan transformed itself into an export powerhouse. yet this period of prosperity coincided with increasing international isolation as countries shifted diplomatic recognition to beijing.

remarkably, this crucible of economic competition and international pressure helped forge modern taiwan. when chiang’s son, chiang ching-kuo, initiated democratic reforms in the 1980s, taiwan embraced the change with enthusiasm, completing a peaceful transition to democracy by the 1990s. this evolution from authoritarianism to democracy, combined with its historical path, has created a society that continues a unique relationship with chinese culture while asserting its own distinct identity.

on a cold january evening in 2024, a crowd gathered before taipei’s presidential office building, warming to the sound of rock music and waving small green flags. the lead singer roared, “let me stand up like a taiwanese” and addressed the crowd in a local dialect. for the assembled crowd of taiwanese voters, this wasn’t just another election – it was the culmination of a remarkable democratic evolution.

this shift has transformed taiwan into a place where political divisions now run through individual families. younger people often disproportionately support the new taiwan people’s party, while their parents tend to split between the traditional democratic progressive party and the nationalists. these domestic political fault lines exist against a backdrop of constant pressure from china.

the united states plays an important role in maintaining the precarious balance of forces. taiwan’s military relies heavily on american support, from f-16 fighter jets to ballistic missiles. taiwan and america’s bilateral military relationship exists in a legal gray area, as most countries – including the us – don’t officially recognize taiwan as a nation.

recent events in hong kong have profoundly shaped taiwan’s political consciousness. when hong kong introduced an extradition law that allowed suspects to be sent to mainland china, taiwan watched closely. the subsequent crackdown on hong kong’s autonomy has served as a stark warning about beijing’s intentions. today, 90 percent of taiwanese now reject china’s proposed “one country, two systems” model, which would allow taiwan a measure of autonomy, while recognizing the people’s republic as having ultimate sovereignty.

for most taiwanese, the question isn’t over whether to maintain independence – this is broadly agreed upon – but how to manage the delicate balance of economic ties and political autonomy in relation to china. for the younger generation especially, it’s about maintaining a distinct taiwanese cultural identity and preserving a democratic way of life.

in taiwan’s hsinchu science park, massive windowless buildings rise up behind a small boundary of trees and decorative statues. security guards watch carefully – and for good reason. these unremarkable-looking structures house one of the world’s most valuable companies, one that sits at the very heart of the global economy: the taiwan semiconductor manufacturing company or tsmc.

inside these buildings, in conditions of almost impossible cleanliness, robotic machines suspended from an electrified ceiling glide eerily, assembling the microscopic components that power our modern world. these components are semiconductor chips – the “brains” of all modern electronics. without them, there’d be no smartphones, computers, modern cars, or advanced medical equipment. tsmc produces a huge fraction of the world’s supply. it’s arguably the most important company most people have never heard of.

the company’s dominance stems from a decision in the late 1980s by founder morris chang. chang realized that the semiconductor industry was becoming too complex and capital-intensive for companies to handle all aspects of chip production – from chip design to manufacturing to sales.

semiconductors are extraordinarily complex to make. the most advanced processes work at an atomic scale, requiring billions of dollars in specialized equipment. a single advanced chip fabrication system requires over 450,000 separate components.

chang’s breakthrough was to simplify: tsmc would focus exclusively on manufacturing. this pure foundry model meant companies could bring their chip designs to tsmc without fear that their intellectual property would be stolen or copied since tsmc had no interest in designing or selling its own chips. this built unprecedented trust with customers and allowed tsmc to focus entirely on perfecting chip fabrication.

and perfect it, it did. over the next three decades, tsmc’s specialization brought it further and further ahead of its competitors. tsmc is now indispensable to the global tech industry. by 2024, it had become the world’s ninth most valuable company, worth over $700 billion and controlling over 90 percent of advanced chip production.

this dominance has profound implications for global politics and the economy. nearly every major tech company depends on tsmc, including those in mainland china. despite massive investments in their own semiconductor industry, chinese manufacturers remain years behind. 

some say this creates a so-called “silicon shield” – tsmc protects taiwan from chinese aggression since any conflict would devastate not just global industries, but china’s own. but others argue it makes taiwan an even more tempting target for beijing. either way, this company has become central to one of the world’s most complex geopolitical relationships.

in a singapore hotel conference room in november 2015, two men in their 60s met for tea. it was a historic moment: taiwan’s president ma ying-jeou and china’s xi jinping, the first-ever meeting between leaders of the two governments. they addressed each other simply as “mister,” chatting about life and the world. 

“no force can pull us apart,” xi declared. “we are one family.” 

ma responded warmly, saying that, despite being their first meeting, “we feel like old friends.”

this moment of optimism proved fleeting. within months, taiwan elected a new president with a more independent stance, and relations rapidly deteriorated. the number of taiwanese living and working in mainland china plummeted by 60 percent in ten years. those who remained increasingly reported discrimination.

for xi jinping, the taiwan issue is deeply personal. during his 16 years as an official in fujian province, he had a front-row seat to early cross-strait relations, watching thousands of taiwanese businesspeople invest in the mainland. this experience shaped his view that economic integration would naturally lead to reunification. but under his leadership, china’s approach has become increasingly assertive, tied to his broader vision of “national rejuvenation” and the “china dream.”

today, the situation is growing ever more tense. military analysts offer varying predictions about potential chinese action, ranging from 2025 to 2027. meanwhile, public opinion in taiwan has shifted dramatically – a 2023 poll showed the highest-ever support for independence, with almost half wanting either immediate or eventual separation from china. what began with a hopeful meeting over tea has evolved into one of the world’s most dangerous flashpoints, with implications far beyond the taiwan strait.

taiwan’s unique history has brought about a distinct identity and place in the global economy, but perhaps taiwan’s greatest challenge today is managing the risk of war. so what is the strategic picture and why would conflict with china be so catastrophic?

between 2021 and 2022, president biden stated three separate times that america would defend taiwan if china attacked. each time his staff has publicly walked back his comments. why? for decades, the united states has maintained a policy of “strategic ambiguity” – remaining deliberately vague about whether it would defend taiwan from chinese attack. the goal of this policy has been to maintain peace by discouraging both chinese aggression and any unilateral moves toward independence by taiwan.

yet some republican politicians have gone even further than biden, with several openly calling for formal recognition of taiwan as an independent nation – something that china has consistently identified as a red line that would trigger military action.

military analysts paint a chilling picture. china would likely begin with cruise missiles and cyberattacks to disable taiwan’s defenses. this would be followed by a naval blockade to isolate the island. an amphibious assault on a scale not seen since world war ii would be next. while china currently lacks some capabilities for this, if it managed to land sufficient forces, the conflict would be unprecedented. urban warfare would devastate taiwan’s cities, while china’s naval blockade would strangle the island’s access to food, fuel, and other essentials.

the global impact would be catastrophic. beyond the immediate human cost, the conflict would slash through the heart of the world economy. one estimate puts the baseline impact at $2 trillion in lost gdp. the world’s supply of advanced semiconductors would halt abruptly, paralyzing industries from smartphones to automobiles. the conflict would likely trigger a severe global depression.

yet the drift toward confrontation continues. china’s frustration is growing as its goal of reunification moves further and further away. meanwhile, american politicians increasingly view taiwan as the frontier where democracy must face down tyranny. taiwan itself grows more culturally distinct from mainland china by the year. in some ways, the situation resembles the build-up to world war i – a conflict no one intended, but no one managed to prevent – a conflict where alliances and miscalculations cascaded toward catastrophe. today, the greatest challenge is maintaining stability against these forces pushing toward crisis.

the main takeaway of this chapter to why taiwan matters by kerry brown is that taiwan represents a remarkable contrast: a vibrant democracy thriving under an authoritarian shadow. from its transformation from dictatorship to democracy to its position as a global tech powerhouse through tsmc, taiwan has carved out an identity distinct from mainland china.

yet taiwan faces unprecedented challenges as china grows more assertive and global tensions rise. this remarkable island of 23 million people continues to become ever more central to global democracy, technology, and peace.

okay, that’s it for this chapter. we hope you enjoyed it. if you can, please take the time to leave us a rating – we always appreciate your feedback. see you in the next chapter.