During the Cold War, it was fine for Taiwan to free-ride on America's anti-communist containment strategy, and to shelter under America's dominant nuclear umbrella. But the situation changed around the time the Cold War ended in 1989.
While communism as an ideology lost the Cold War, the Chinese Communist Party studiously avoided the Soviets' fate. The CCP adopted just enough market freedoms to generate the easy catch-up prosperity needed to bribe its recently-starving citizenry into continued servility. But the CCP's legitimacy also leans heavily on the idea that the evil capitalists and oppressors who took refuge in Taiwan must never gain independence. The CCP's propaganda has convinced its 1.4 billion citizens that Taiwan independence is an intolerable affront to Chinese national identity. Of course, the real problem is that Taiwan is more than 3 times more prosperous than China, and enjoys vastly more political freedom. Together, these two undeniable facts are an existential threat to the ideological legitimacy of the CCP. For at least thirty years, the CCP leadership has known that they are only one Beijing Spring away from spending the rest of their lives in jail (or worse).
So the CCP leadership is playing for keeps in aspiring to finally complete the conquest of Taiwan. The American guarantee of Taiwan's defense was arguably a good idea back when it had almost no marginal cost. But now, a credible defense of Taiwan would cost America more than Americans (or the people of Taiwan!) are willing to pay. Even worse, it runs a constant and growing background risk of a catastrophic war that would stretch from the Taiwan Strait to at least Guam, inland China, Japan, Wall Street, near-Earth orbit, and cyberspace.
And it could easily lead to nuclear war. If China set up a sea and air blockade of Taiwan, the U.S. would have to either back down, or challenge this act of war by eventually shooting its way through the blockade. Win or lose, the resulting conventional war would be a catastrophe for America's economy. But worse, the war would be an existential threat to the CCP leadership. Military defeat would not be acceptable when they have a nuclear arsenal just sitting there. So they likely would nuke some mainland American target, or at least threaten to.
Which one? It would be a target with high strategic or economic value relative to civilian casualties. So forget Washington D.C. or Manhattan or any major metropolitan downtown. A lower-yield nuke into Pearl Harbor would mostly spare Honolulu, but the Pacific Fleet's carriers would once again not be present, and the historical precedent is not a good one. Hollywood would be an interesting economic/cultural target, but the population density is high, and the headline would be "L.A. Nuked". A better target would be anywhere along the 13-mile line from Sand Hill Road to Santa Clara Stadium. That line is the backbone of Silicon Valley: venture capital, Stanford University, the Page Mill Rd. Stanford business park, the Google campus, and the remainders of the Valley's aerospace and semiconductor industry. That's where South Korea might aim a trans-Pacific nuke if it could. But China would instead be tempted to aim five miles south, and take out the Apple campus in Cupertino -- especially if they thought it would help them dominate the smartphone industry.
Whatever target they chose, America would be much more averse to this escalation than would the CCP. And so America should game this out, and cut its losses. There is no strategic hope for the 24M people of Taiwan to remain independent from those whose control of 1.4B Chinese depends on a commitment to ending that independence.
Taiwan has been a losing hand since the Berlin Wall fell and China's market economy rose. It's just an accident of geography that the CCP victory in 1949 was not total. When the freedom of Taiwan was relatively cheap to guarantee, it was worth guaranteeing. But it's not worth sacrificing a Cupertino.
This is not yet understood -- neither in official Washington nor in Taiwan itself. More than half of the people of Taiwan expect America to fight for their independence, but the people of Taiwan are unwilling to mount a credible deterrent. So some U.S. president should say publicly what Trump said privately: "Taiwan is like two feet from China. We are 8,000 miles away. If they invade, there isn’t a f***ing thing we can do about it."
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