NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Banking and finance

Why Taiwan matters to the world

Financial Times
10 Apr, 2023 08:54 PM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

An antiquated 40mm anti-air gun points towards sea at the observation deck on Beigan, part of Matsu Islands, Taiwan. Photo / AP

An antiquated 40mm anti-air gun points towards sea at the observation deck on Beigan, part of Matsu Islands, Taiwan. Photo / AP

OPINION

Should the US defend Taiwan? This is not an abstract debate. Over the weekend, Beijing simulated bombing raids on the island, while its navy encircled Taiwan.

In response to the steady escalation of Chinese military pressure on the island, President Joe Biden has promised — four times — that the US would defend Taiwan from an attack by China.

For some in America, Biden’s pledges are little short of madness. Doug Bandow of the Cato Institute, a think-tank, complains that “most [American] policymakers are prepared to risk national suicide to protect Taiwan”. Why should war-weary America threaten to fight China, another nuclear-armed power, to defend an island of 24 million people that lies roughly 100 miles off the Chinese coast?

Scepticism about defending Taiwan is even more pronounced in parts of Europe. Flying back from a visit to China last week, President Emmanuel Macron implied that France would not lift a finger to protect the island. Discussing Taiwan, he told Politico that the “great risk” for Europe is getting “caught up in crises that are not ours”.

Advertisement
Advertise with NZME.

In reality, few expect European militaries to get directly involved in a conflict over Taiwan. But the attitudes of European politicians such as Macron matter, since they will affect Chinese calculations of the economic and diplomatic costs of any attack.

It would certainly make life easier for Europeans and American leaders if they had no reason to worry about the fate of Taiwan. But the reality is that a forcible Chinese annexation of the island would have profound global consequences that would quickly be felt in Paris, as well as Peoria.

There are three main arguments for sticking up for Taiwan. The first is about the future of political freedom in the world. The second is about the global balance of power. The third is about the world economy. Together they amount to a compelling case to keep Taiwan out of Beijing’s clutches.

Advertisement
Advertise with NZME.

The Chinese Communist party argues that one-party rule is the perfect system for China. The US, it insists, should stop trying to promote liberal, democratic values — which are not working well in the west and which would spell disaster for a communitarian culture such as China’s. But Taiwan, a thriving and prosperous society, is living proof that Chinese culture is completely compatible with democracy. Its existence keeps alive an alternative vision for how China itself might one day be run.

Beijing has already crushed aspirations for democracy in Hong Kong. If Xi Jinping were allowed to do the same in Taiwan, autocracy would be entrenched across the Chinese-speaking world. Because China is the emerging superpower of the 21st century, that would have bleak political implications for the world. Those who are cynical about US democracy promotion might enjoy China’s autocracy protection even less.

The idea that mainland China will one day embrace political freedom remains a distant prospect. But the Indo-Pacific region as a whole has several thriving democracies including Japan, South Korea and Australia. They all depend to some extent on a security guarantee from the US.

If China crushed Taiwan’s autonomy, either by invading or by strongarming the island into an unwilling political union, then US power in the region would suffer a huge blow. Faced with a prospect of a new hegemonic power in the Indo-Pacific, the region’s countries would respond. Most would choose to accommodate Beijing by changing their foreign and domestic policies. The desire to avoid giving offence to the prickly new hegemon would quickly restrict freedom of speech and action for China’s neighbours.

The implications of Chinese dominance of the Indo-Pacific would also be global, since the region accounts for around two-thirds of the world’s population and of gross domestic product. If China dominated the region, it would be well on the way to displacing the US as the world’s most powerful nation. The idea that Europe would not be affected by that shift in global power is absurd. Now, more than ever, Europe is dependent on America’s willingness to face down Russia, China’s despotic ally.

Some might argue that abstract notions like “hegemony” matter little to ordinary people. But a quirk of Taiwan’s economic development means that control of the island would quickly have major implications for living standards all over the world.

Taiwan produces over 60 per cent of the world’s semiconductors and about 90 per cent of the most sophisticated ones. The gadgets that make modern life work, from phones to cars and industrial machinery, are run with Taiwanese chips. But the factories that produce them could be destroyed by an invasion.

If Taiwan’s chip factories survived but fell under Chinese control, the economic implications would be huge. Control of the world’s most advanced semiconductors would give Beijing a chokehold over the world economy. As the US has already discovered, replicating Taiwan’s semiconductor industry is much harder than it sounds.

Advertisement
Advertise with NZME.

All these considerations — economic, strategic, political — make a compelling case for the US and its allies to protect Taiwan. No one in their right mind wants a war between America and China. But now, as in the past, it is sometimes necessary to prepare for war — to keep the peace.

Written by: Gideon Rachman

© Financial Times

Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Latest from Banking and finance

Business|companies

House prices to be 20% lower in real terms by mid-2030s - forecast

18 Jun 08:42 PM
Business|companies

Major banks halt over-counter deposits into others' accounts

15 Jun 07:37 PM
Interest rates

Final big bank drops home loan rates after OCR cut

12 Jun 05:52 AM

Kaibosh gets a clean-energy boost in the fight against food waste

sponsored
Advertisement
Advertise with NZME.

Latest from Banking and finance

House prices to be 20% lower in real terms by mid-2030s - forecast

House prices to be 20% lower in real terms by mid-2030s - forecast

18 Jun 08:42 PM

House prices will be 20% lower in real terms by the mid-2030s than in 2021.

Major banks halt over-counter deposits into others' accounts

Major banks halt over-counter deposits into others' accounts

15 Jun 07:37 PM
Final big bank drops home loan rates after OCR cut

Final big bank drops home loan rates after OCR cut

12 Jun 05:52 AM
ASB offers $150,000 interest-free loans for farm solar systems

ASB offers $150,000 interest-free loans for farm solar systems

09 Jun 11:51 PM
Engage and explore one of the most remote places on Earth in comfort and style
sponsored

Engage and explore one of the most remote places on Earth in comfort and style

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP