Nancy Pelosi’s visit to Taiwan has taken the center-stage of U.S foreign policy during the past month. While many in the U.S foreign policy establishment see the visit as a win for democratic self-governance, there are perhaps more sinister reasons for Pelosi’s visit. In fact, Pelosi’s visit is an affirmation of U.S imperialism’s success in exploiting Taiwanese nationalism to their own interest. To understand how this process has occurred, it’s imperative to understand the history of Taiwan post-Chinese Civil War.
Origins of Taiwanese Separatism
During the Chinese Civil War, the Kuomintang ( KMT) and Communist Party fought to determine who would rule over China. Eventually the Communists took over the mainland, and the KMT began to retreat to Taiwan. When the KMT arrived in Taiwan, it took control of a large bureaucratic apparatus left in place by the Japanese colonial government after WW2. The KMT nationalized many Japanese enterprises, and many former mainlanders were staffed as high-paying bureaucrats (Wang, 2021, p. 56). “Mainlander' refers to those who came to Taiwan after retreating from the Chinese mainland due to the Civil War. However, in the process of mainlanders staffing the new government, many native Taiwanese who were part of the Japanese colonial bureaucracy lost their jobs (Wang, 2021, p. 67). These economic decisions created a contradiction between those that came from the mainland and the native Taiwanese. It should also be noted that Native is a designation that refers to those whose family history in Taiwan pre-dates the KMT arrival on the island. It does refer to the aboriginal Taiwanese who settled in Taiwan thousands of years ago.
The KMT haphazardly tried to get more benshengren to support them. In the 1950s, the party instituted land reforms that broke the feudal relationship between landlords and tenants in rural areas. The reforms included establishing rent controls and breaking up large landlord holdings and mortgaging them to tenants (Wang, 2021, p. 71-75). However, the opposition of social forces in rural areas would eventually shift from between the native landlords and the peasants to the KMT government and the new farm-owners. The farm-owners owed the government a 10-year mortgage and the government wanted to finance their budget by collecting more agricultural surplus (Wang, 2021, p. 74-75). The primary opposition of social forces, even in rural areas where the KMT tried to garner support, shifted to a Waishengren(mainland)-Benshengren(native) opposition. Other actions included compulsory education in Mandarin and punishment in schools for speaking other languages like Hokkien. All combined, these actions resulted in the native Taiwanese feeling alienated from the KMT and its vision of Chinese Nationalism.
These policies also provided the conditions for Taiwanese nationalism and independence to occur. Benshengren intellectuals, domestic and abroad, along with a newly emerged middle class began to cultivate a unique ”Taiwanese identity.” This newly minted identity tried to distinguish Taiwanese people from mainland Chinese and the recently arrived KMT ”foreigners.” It also created the intellectual foundations of the independence movement. This energy was transformed into electoral politics when the Democratic Progressive Party (DPP) formed in 1986. As Taiwan underwent political liberalization, the DPP’s concerns began to get heard more in the Legislative Yuan, Taiwan’s official legislature. In particular, the DPP began to oppose closer economic cooperation with mainland China, as linking the two economies could undermine the independence movement.
As this happened, Taiwan significantly developed its chip manufacturing industry, becoming one of the world leaders in the industry. Today, electronics manufacturing is arguably the leading industry in Taiwan. Not only is chip manufacturing important for Taiwan’s economy, but access to semiconductor chips is especially important for China, who is looking to create their own indigenous high-tech industries. Over the years, China has accounted for 60% of the semiconductor demand in Taiwan. However, the United States is now utilizing the current DPP administration’s nationalist sentiments to cut off this vital economic relationship and gain unprecedented access to chip manufacturing production.
The growing relationship between TSMC and the United States
Taiwan is one of the leading chip producers in the world, and its largest national company, Taiwan Semiconductor Manufacturing Company (TSMC), records a 53% overall market share in the global semiconductor foundry market (Lee, 2021). Overall, Taiwan’s semiconductor contract manufacturers account for approximately 63% of the global foundry revenue in the world. Taiwan supplies its chips to various multinational corporations, including Apple, Qualcomm, and NVIDIA. The small Asian island is monumentally important for computer manufacturing, military weapons manufacturing, and other U.S and Chinese industries.
Washington began implementing export controls in 2020 to prevent China from obtaining important chips. It also prevented SMIC, China’s most important semiconductor foundry, from receiving manufacturing inputs from U.S companies (Chiang, 2022). In response to the export controls, TSMC halted their chip exports to Huawei (Chiang, 2022). Recently, U.S President Joe Biden signed the CHIPS act, which attempts to revitalize domestic semiconductor manufacturing in the United States (Cherney, 2022). In addition to this, TSMC has also announced its intention to build a manufacturing facility in Arizona in the past year.
During Pelosi’s visit to Taiwan, she met with TSMC Chairman Mark Liu and Founder Morris Chang. While details about the meeting are hazy, given the current geopolitical climate, it seems likely that moving manufacturing to the United States was a point of discussion. In fact, back in 2020, TSMC announced it was building a new 5 nm chip manufacturing plant in Arizona. If TSMC moves much of its production to the U.S, it is possible that the U.S will demand technology transfer agreements because of the incoming subsidies through the CHIPS Act, which will allocate $53 billion for domestic manufacturing and research and development. These moves can prevent China from being able to advance their domestic productive forces and thus make them more reliant on foreign exports in the far future. In addition, this could hurt Taiwan in the future, as the island will lose its edge in its largest industry to serve the United States’ interest in preventing China’s rise.
Potential Results of U.S-Taiwan Cooperation
The U.S. has begun stationing more troops in Taiwan over the past year. In fact, U.S military personnel doubled on the island in 2021 (Hale, 2021). The increased military on the island is a continuation of Barack Obama’s ‘Pivot to Asia’ in the early 2010s. That period was accompanied by increased military ties across various countries in Asia. As a result, the United States has “contained” China’s mainland on its eastern seaboard. Getting cozier with those who advocate Taiwanese independence can assist the U.S military in containing the Chinese mainland even further.
Additionally, according to Eswar S. Prasad, a scholar at the Brookings Institute, geopolitical tensions between the U.S and foreign entities appear to cause foreign banks to be net aggregate purchasers of U.S treasury securities (Tharappel, 2021, p. 42). Along with securing semiconductor supply chains domestically, securing a military base in Taiwan and furthering tensions with China could help the United States maintain its currency hegemony across the world.
Many in the U.S foreign policy establishment have applauded Pelosi’s visit to Taiwan because of her unwillingness to back down from Beijing’s threats. However, these analysts often use Realist frameworks that prioritize the United States’ economic and political interests over all else. But when looking at the Taiwan-Strait situation through an anti-imperialist framework, it can be shown that Pelosi’s visit is a mere continuation of the United States’ attempts to project its imperial hegemony.
Kaushik Sampath is an undergraduate student at Stanford University and currently is a desk editor for the school newspaper, The Stanford Daily. He is planning to major in Computer Science and Chemistry.
Cherney, M. (2022, July 29). Chipmakers got their $52 billion. It will now take years for American chipmaking to flourish. Protocol. https://www.protocol.com/enterprise/52-billion-intel-chips-act.
Chiang, M. (2022, August 8). Strategic Export Controls Are Quietly Frustrating China’s Ambitions. Heritage. https://www.heritage.org/asia/commentary/strategic-export-controls-are-quietly-frustrating-chinas-ambitions.
Hale, E. (2021, Dec 2). US Nearly Doubled Military Personnel Stationed in Taiwan This Year. VOA News. https://www.voanews.com/a/pentagon-us-nearly-doubled-military-personnel-stationed-in-taiwan-this-year-/6337695.html.
Lee, Yen Nee. (2021, March 15). 2 Charts Show How Much the World Depends on Taiwan for Semiconductors. CNBC. https://www.cnbc.com/2021/03/16/2-charts-show-how-much-the-world-depends-on-taiwan-for-semiconductors.html.
Tharappel, J. (2021). Why China’s Capital Exports Can Weaken Imperialism. World Review of Political Economy, 12(1), 27-49. https://www.scienceopen.com/hosted-document?doi=10.13169/worlrevipoliecon.12.1.0027
Wang, H. (2002). Class Structures and Social Mobility in Taiwan in the Initial Post-War Period. The China Journal, 48(1), 55-85. https://www.jstor.org/stable/pdf/3182441.pdf?refreqid=excelsior:d45435431b7ba7f77d943a55896b9290&ab_segments=?igin=