In May 2021, the Economist headlined that Taiwan was the most dangerous place on earth.
In February 2022, Russia invaded Ukraine.
On October 7, 2023, Hamas killed 1,189 people in Israel and captured over 200 hostages. This triggered a war against Hamas in Gaza, as well as missile strikes by Hezbollah and even Iran!
Meanwhile, the Chinese military are content to carry out exercises around Taiwan, their planes crossing the median line of the Strait for a few moments before returning home. There were two two-day blockades after Pelosi's visit and President Lai's inauguration speech, but the Taiwanese population pays less attention to them than to Nvidia CEO Jensen Huang's speeches.
While the Western media believe that the Chinese army will descend on the Taiwanese coast at any moment, the Taiwanese don't seem to believe it too much. I think they're right, and here's why.
Thucydides' trap was conceptualized a long time ago and concludes that every time a new power emerges, it establishes its dominant position by inflicting a military defeat on the old power. According to most American analysts, it seems, confrontation with China cannot be avoided, and Taiwan is the point at which this confrontation is most likely to take place.
The first weakness of this argument is that it is often the same experts who tell us that China will experience huge demographic problems, that it will become old before it becomes rich, that its authoritarian system does not allow creativity and entrepreneurship to flourish... In short, if China remains number 2, we avoid Thucydides' trap and everything returns to normal!
If China is experiencing a crisis in its real estate and construction sector in general, it's because it's reaching the end of a growth cycle. I refer you to this video by Charles Gave, which explains this well, and shows that China is managing this change quite well (the IMF estimates that its GDP growth will be 5% in 2024).
Back to Thucydides' trap? Perhaps, but not in the way we might imagine.
First of all, the USA is the world's leading military power. Its defense budget far exceeds that of any other nation. What's more, the USA is primarily a naval and air force. The Chinese army, on the other hand, is especially strong on land, thanks to its large population. In fact, the USA and China have roughly 2 million soldiers each! But American soldiers are far more experienced, having fought in Iraq, Afghanistan, Syria, advised Ukraine, Israel... The Chinese army's last battle was in 1979. Since then, the People's Liberation Army (PLA) has never seen battle again, and every soldier is an only child.
If you were the American general-in-chief and you wanted to defeat China, you'd want to fight China in the naval arena. (And ideally, you'd want another army to do the fighting for you, like Ukraine vs Russia.) The sea is where the USA is strongest and China weakest. But the Chinese know Sun Tzu's Art of War by heart. They won't make the mistake of attacking where the enemy is strongest. What's more, what's the point of conquering territory if it means destroying what gives it value? The Americans have already threatened to destroy TSMC's factories in the event of an invasion, so that they don't fall into Beijing's hands!
For all these reasons, China would be at a disadvantage if it tried to take Taiwan by force. It also sees the (bad) example of Russia, which is suffering economically and humanely in its conquest of the Ukraine. I don't think China's leaders want to be drawn into the military terrain of the USA. It's much more in their interest to continue gaining power in the field they master, the economy!
I think the Biden administration has realized that China wasn't going to fall into the Taiwan trap, and changed its tune by trying to prevent China from developing its own semiconductors. Washington has prevented ASML, a Dutch firm, from selling its etching machines to China. Biden has also just imposed substantial customs duties on Chinese imports of electric cars, batteries, photovoltaic panels... On the economic front, I'm not sure the USA can win, but at least it's still leading in many high tech segments.
That leaves the financial sector, where there is talk of de-dollarization, but not yet of the RMB as a reserve currency. US public debt has reached 123% of GDP and continues to rise rapidly. China's defense spending on naval armaments can be seen as a military threat, as a peace factor (Si vis pacem, para bellum: if you want peace, prepare for war), or as a means of forcing the USA to spend heavily on its defense in order to weaken its financial system and confidence in the dollar. Perhaps China is trying to do to the USA what the latter did to the USSR: an arms race that ruined the Soviet Union and allowed Reagan to win the Cold War without a fight? It would be ironic if Washington were to fall into its own trap. But such is the art of war: the ideal is to win without fighting.
Note: It is therefore in China's interest to act as if it were preparing to invade. If it wants to force Taiwan to unify with it, it must use both the military stick and the economic carrot. Without a stick, the independence fighters would declare independence and make Beijing's leaders lose face.
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