The future of Taiwan’s relationship with China and the United States, will be influenced by a complex interplay of economic, political, cultural, and strategic factors, as well as evolving attitudes and priorities within Taiwan. Taiwan faces limited options and high risks, regardless of the path it takes

Taiwan is at a crossroads in its relationship with China and the United States. The country’s future as an independent democratic nation hinges on whether it chooses to strengthen its ties with the US or integrate economically with China.  Recent tension between China and Taiwan has increased the possibility of Chinese aggression, which has led to a renewed interest in the concept of One Zhonghua, a confederation of independent Chinese states.

Former Taiwanese Vice President Annette Lu has proposed the creation of a Chinese-Taiwanese commonwealth that would be economically integrated but politically separate, an idea that has been discussed for many years but has gained renewed attention due to the conflict in Ukraine. This proposal speaks to the unresolved question of what the relationship between China and Taiwan should be.

There is a divided opinion in the country on how to deal with a potential threat of Chinese invasion. The level of devastation such an invasion could bring to the country has caused serious concerns since Taiwan is an island that would run out of natural gas in just eight days if blockaded. Additionally, the Chinese military is nearly 12 times larger than Taiwan. Taiwan’s prosperity is partially due to its role as a gateway to China, the world’s largest market. With rivalries between the United States and China escalating, Taiwanese citizens are grappling with deciding whether to prepare for a potential conflict like Ukraine or negotiate a deal to avoid it.

Each option has its own consequences. Most Taiwanese people desire to maintain the current status quo of undeclared, de facto independence. Nonetheless, approximately 40% of the recent survey respondents expressed the desire for enhanced economic relations with China, while a smaller percentage suggested that economic ties should be decreased. Taiwanese citizens are grappling with the question of how to safeguard their open, prosperous, and innovative society.

Taiwan’s relationship with China will determine who wins the country’s presidential election in January and the fate of its fledgling democracy. The two main political parties of Taiwan, the Democratic Progressive Party (DPP) and the Kuomintang (KMT) have differing views on the best path forward. The DPP, currently in power, advocates for closer ties with the US and maintaining the status quo of de facto independence from China. The DPP also seeks to bolster Taiwan’s military capabilities through hi-tech weapons purchases from the USA and make China think twice about launching an invasion. The KMT, on the other hand, favors closer ties with China, including economic integration.

If Taiwan decides to integrate its economy with China, it could benefit from increased trade and investment from China, which is currently Taiwan’s largest trading partner. The Chinese market is also larger than Taiwan’s, providing Taiwanese businesses a greater opportunity to expand their market and increase profits.

The future of Taiwan’s relationship with China and the United States, will be influenced by a complex interplay of economic, political, cultural, and strategic factors, as well as evolving attitudes and priorities within Taiwan. Taiwan faces limited options and high risks, regardless of the path it takes. With tensions between China and Taiwan rising, the issue of economic independence has become a significant concern for the island nation. Although its industrial sector may be able to withstand the pressure, other sectors, like agriculture, are already experiencing the impact of China’s ban on certain Taiwanese exports.

There are numerous economic risks associated with integration with China. One danger is that Taiwan can grow overly reliant on the Chinese market, leaving it vulnerable to changes in Chinese Economic policy or any political tensions between the two nations.

Another possible risk is that the US could perceive closer economic ties with China as a threat to its economic interests and may retaliate with trade restrictions or tariffs.

Additionally, the US has been a longstanding ally of Taiwan, and any significant shift in Taiwan’s economic or political relationships could strain this relationship.

Taiwan enjoys several economic benefits from its economic integration with the United States, one of its major trading partners. Some of these benefits include access to a large US market and technology transfer from the US that helps Taiwan to develop new products, processes, and services that help enhance its competitiveness.

The investment opportunities available in the US are another advantage to Taiwan because of its long relationship with the USA. The intellectual property laws and a robust legal system in the USA provide Taiwanese companies with protection for their intellectual property rights, which is critical for businesses that rely on innovation. Last but not least important is that the US and Taiwan collaborate on various educational and research initiatives providing Taiwanese students and researchers access to cutting-edge research and technologies, which they can apply in their work.

Ultimately, Taiwan will have to tackle the issue of economic independence in the coming years. As tensions with China continue to rise, finding new markets for Taiwanese goods may become an increasingly urgent priority. But for those who rely on the Chinese market, the idea of economic independence may come at too high a cost.

Taiwan’s relations with China will probably improve if the KMT wins the upcoming elections because the party has historically been more receptive to economic integration with China. It is crucial to remember that not everyone in Taiwan agrees with the KMT’s position on China, with one of the concerns that stronger connections with China could jeopardize Taiwan’s sovereignty and independence.

The role of these two parties in determining the future of Taiwan’s relationship with China and the United States is significant as they represent two major political forces in Taiwan. The outcome of the presidential and legislative elections can determine the future course of Taiwan’s relationship with China and the United States. The political parties’ differing stances and policies play a crucial role in determining how Taiwan will navigate the complex geopolitical landscape in the coming years.

Under arrangement between Matrix and CRSS.