Backs against the wall: ‘No retreat’ in face of Beijing’s invasion of Taiwan

Depending on who you ask, the world is torn between three individual flashpoints, each with the potential to plunge their respective regions into a wider, devastating conflict, but arguably, only the Taiwan flashpoint has the potential to cause the outbreak of the Third World War.

For Beijing, the breakaway renegade island democracy is a powerful and humiliating reminder of the rising superpower’s troubled and “embarrassing” history during the 19th and early-20th century, where it was the playground of foreign empires eager to exploit the wealth and prestige of the East, eventually culminating in the victory of Mao’s Revolution in 1949.

The survival and expulsion of Chinese Nationalist leader Chiang Kai-shek’s routed forces to the island of Taiwan, under the tacit protection of the United States, is the last embarrassing slap in the face for the Middle Kingdom following the end of the “Century of Humiliation”.

In contrast, for the United States, the enduring support for the self-governing Taiwanese people stands out as one of the last remaining ideological battlegrounds of the Cold War between Marxist Communism and liberal democracy and serves as a major test about the enduring commitment and capacity of the United States to defend its post-Second World War global order.

Simultaneously, for Australia and US, allies both in the Indo-Pacific and more broadly across the globe, the potential for a Chinese annexation of Taiwan and the ensuing implications and fallout (no pun intended) for the global “rules-based order”, as built and maintained by the United States in earnest since the end of the Second World War, heralds a potentially catastrophic reality few are able to comprehend.

These high stakes for both sides represent a major point for potential escalation as both sides see any potential conflict over Taiwan as a “must-win” scenario, something highlighted by Rice University’s Baker Institute for Public Policy, in an report titled Annexation of Taiwan: A Defeat From Which the US and Its Allies Could Not Retreat.

Authors Gabriel Collins, Baker Botts Fellow in Energy and Environmental Regulatory Affairs, and US Naval War college professor Andrew Erickson paint an incredibly grim picture, stating, “The aftermath would likely trigger the worst economic shocks experienced in more than a century, unleashing a cycle of repression and diminishing the quality of life for populations across Asia and beyond, with devastating impacts on American interests and Americans’ wellbeing. Moreover, China’s annexation of Taiwan could exacerbate regional tensions and extend into a broader, global conflict.”

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A high-risk scenario for both parties

It is well established that both sides have massive, vested interests in the reunification and defence of Taiwan, respectively (depending on which lens you’re viewing it through); the potential for escalation presents a major challenge and risk to global and regional security.

The true scale and scope of the economic, political, and strategic fallout of such a conflagration, regardless of the outcome would be truly earth-shattering, as the world comes to terms with a new and equally unprecedented and unpredictable environment.

Collins and Erickson highlight the driving motivation behind Beijing’s push to reunify Taiwan forcibly, if necessary, stating, “Xi has strong motivations to annex Taiwan through the threat or use of force.

“The key objective would be to assert political control over the island and capture much of its industrial and technological infrastructure intact while attempting to limit escalation and thwart intervention. Such a move would mark a critical step toward achieving Xi’s so-called ‘China Dream’ and fulfilling the Chinese Communist Party’s (CCP) promise to reclaim all major territories historically associated with China in some form, of which Taiwan is the crown jewel,” the pair stated.

This broader economic play which serves as one of Beijing’s underlying motivations, only serves to reinforce the tactical and strategic importance of securing Taiwan and defending it from Chinese aggression from the US and broader Western perspective, given the exposure of these economies to key supply chain vulnerabilities.

Collins and Erickson elaborated on this, stating, “Due to Taiwan’s global dominance in the semiconductor industry, it is important to emphasise that America could not fully retreat from such a defeat. A coercive unification of Taiwan with China would likely disrupt global techno-industrial supply chains for years to come...

Going further, they said, “A major semiconductor supply disruption triggered by PRC coercive annexation of Taiwan could result in global economic loss on a par with, or worse than, that caused by World War II – the largest decline in gross domestic product (GDP) in the past 120 years ... A disruption in the supply of advanced Taiwanese semiconductors would stall progress in critical fields such as medicine and materials science. Inferior substitutes would, in a best case, require massively increased electricity use – with major energy costs and climate security impact – merely to deliver vital societal functions at reduced performance and potential.”

However, these risks are only the “first order” effects outside of the military conflict, with broader economic, political and strategic implications for the region in particular.

For the US, in particular, the successful annexation of Taiwan by China would effectively signal the end of American primacy both in the Indo-Pacific and, more broadly, on the global stage.

Collins and Erickson detailed this saying, “The PRC’s successful annexation of Taiwan would cripple US regional credibility and seriously damage its alliance relationships. China would likely be perceived as Asia’s clear dominant power if it subsumed Taiwan while managing to deter (or defeat) a US-led military intervention.

“Beijing’s core political and informational motivations for extinguishing Taiwan’s autonomy underscore the island’s unique importance. As a beacon of capitalist democracy, it demonstrates the ability of a society with diverse Chinese (and other) heritage to address repressive history, value individual life and liberty, engage cooperatively abroad, and chart its own course.”

This combination of physical and psychological factors only serve to further impact the global and regional balance of power, while accelerating the rise of a truly competitive, multipolar global environment.

A divided, deglobalised Indo-Pacific

Beijing’s successful annexation of Taiwan would serve to establish what US-based geopolitical analyst Peter Zeihan described as a “deglobalised” world, saying, “A deglobalised world doesn’t simply have a different economic geography, it has thousands of different and separate geographies. Economically speaking, the whole was stronger for the inclusion of all its parts. It is where we have gotten our wealth and pace of improvement and speed. Now the parts will be weaker for their separation.”

In particular, the collapse of the United States as the central foundation of the Indo-Pacific’s economic, political, and strategic stability would have dramatic and irreversible impacts on Australia, South Korea, Japan, the Philippines, and a host of other nations directly entrenched in the US regional and global alliance network.

Collins and Erickson detailed the earth-shattering impact on the region in the event of a Taiwanese and allied defeat, saying, “Economic exclusion from East/Southeast Asia or access conditioned on acquiescence to a PRC-dominated system would threaten American security and prosperity. Moreover, unlike Washington, a regionally-dominant Beijing would likely reject strategic hedging by members of the Association of Southeast Asian Nations (ASEAN).”

But it doesn’t stop at the dramatic economic implications, with the collapse of US military capability and presence, precipitating a rapid proliferation of nuclear arsenals with expectations that South Korea and Japan would launch their own nuclear programs, while India and Pakistan would be expected to expand their own nuclear arsenals.

Meanwhile, the rising military primacy of China would further complicate the freedom of movement and tactical and strategic options of nations including Australia, Japan, and South Korea as the US is left to lick its wounds and balance its other global priorities.

“China’s gaining control of Taiwan would compromise sensitive technologies and information, degrade monitoring of PRC military operations, and enable PRC dominance over the primary approaches to South Korea, Japan, and the Philippines. This could significantly affect the ability of Seoul, Tokyo, and Manila to act autonomously, thereby calling into question US commitments to its allies. It could also drive Seoul and Tokyo to seriously contemplate developing nuclear weapons as a means to backstop their autonomy," Collins and Erickson stated.

Yet despite this, Australia seems to be making little in the way of progress when it comes to accelerating the necessary mass of platforms and enabling capabilities to protect our interests in the region, while also meaningfully contributing to the preservation and expansion of the post-Second World War order.

Final thoughts

Australians are going to be asked to accept a number of uncomfortable realities the in coming years. First and foremost, we will have to accept that while the world is increasingly becoming “multipolar”, the Indo-Pacific, in particular, is rapidly becoming the most hotly contested region in the world.

Critically both the Australian public and our policymakers will have to accept that without a period of considered effort, investment and reform will be required to arrest the nation’s period of "managed decline" and stagnation and reverse it in order to provide generations of Australians with the economic opportunity and prosperity and security the post-World War II generations have enjoyed.

Recognising this array of challenges and opportunities, both the Australian public and its policymakers need to look beyond the myopic lens of short-termism that has traditionally dominated our diplomatic, strategic, and economic policy making since Federation.

Ultimately, we need to see Australia begin to play the long game to fully capitalise on the opportunities transforming the Indo-Pacific.

The most important questions now become, when will we see a more detailed analysis and response to the challenges and opportunities facing Australia and when will we see both a narrative and strategy that better helps industry and the Australian public understand the challenges faced and opportunities we have presented before us?

As events continue to unfold throughout the region and China continues to throw its economic, political, and strategic weight around, can Australia afford to remain a secondary power, or does it need to embrace a larger, more independent role in an era of increasing great power competition?

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..