China, Taiwan and the US – Pamir’s analysts assess Taiwan Strait tensions

At the end of March The Pew Research Center, a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world, reported that Americans are increasingly worried about China-Taiwan tensions. According to Pew, 47% of US adults say tensions between mainland China and Taiwan are a very serious problem for their country, up 4% since October 2022 and 19% since February 2021.

But why is Taiwan so important to the US? In this article Taiwan: Explaining the U.S.-China dispute and why it matters, NBC News writes that “The status of Taiwan is among the biggest flashpoints in U.S.-China relations, which are at their lowest point in decades. Though the United States does not have official relations with Taiwan, it is the island’s most important international backer... Indeed in a 2022 “60 Minutes” interview on CBS, Biden responded “yes” when asked whether U.S. forces would defend Taiwan against a Chinese attack”.

As for what the two countries have in common, in the NBC article, Lev Nachman, a political scientist and assistant professor at National Chengchi University in Taipei, is reported as saying:

“There are political, economic and cultural reasons Americans should care about Taiwan.

Politically, it helps keep peace and stability in the world for Taiwan to remain a free and fair democracy as it exists.

Economically, Taiwan is one of the United States most important trading partners, and one of the most important economic pieces of the global economy, particularly as a manufacturer of strategically important semiconductor chips.

Culturally, what the everyday American wants is very similar to what the everyday Taiwanese person wants, which is to be able to wake up and try to fulfill whatever their livelihood dreams are.”

For organizations with existing operations in China and Taiwan, or thinking about investing there, Pamir’s recent Executive Briefing titled “Taiwan Update” analyses the possibility of Chinese military action against Taiwan, discusses US investment in military hardware for Taiwan and the recent trade mission visit to Taiwan by Virginia Governor Glenn Youngkin.

Our analysts have marked the rising tensions in the area as a Level 3 Level of Concern which indicates aggressive escalation of cross-Strait tensions.

The position of Pamir’s team of experts is that:

“For many years Taiwan businesses have largely shrugged off the difficulties of conducting operations in China. Pamir anticipates that traveling to the mainland for Taiwan employees has become riskier as the possibility of being detained on dubious charges has increased. US companies will have little recourse if an employee goes missing”.

In terms of the impact of the Taiwan Strait risk environment on foreign businesses, Pamir advises that:

• Companies should alert staff that any cross-Strait communications —telephone, e-mail, WeChat, or other messaging — related to content prohibited or otherwise deemed suspicious in China could raise their profile and make them targets.

• Unintended risk may come from personal contacts who might have reason to report an individual or from overzealous local authorities hoping to impress superiors. China’s new counterespionage law requires Chinese citizens to report suspicious activities.

If you need to understand what this means in practice for your business, then our experts can help.

About Pamir

Pamir’s team of experts constantly tracks critical developments and trends in China, Taiwan and across Asia, so we can provide our clients with deep insight on geopolitical impact, risk landscape, and competitive strategies that helps them protect their past and current investments – and plan for the future.

Our customers include:

• Growth and scale-up companies, seeking supply chains in China
• Medium-sized companies with established Chinese operations
• Fortune 100 companies with an established presence in China.

Among our other exclusive services, we produce regular Executive Briefings for our clients which discuss the latest issues and recommend the actions they need to take.

Get In Touch – Pamir, your strategic partner to protect your global investments

If you are considering China, or any other country in Asia, as a location for a new plant, seeking new Asian suppliers and partners, or if your business is already active in the region, then you need to be proactively protecting your operations and investment.

Please Get In Touch to discuss how we can help protect your investments in China – and other parts of Asia.