Chinese and Taiwanese Prosperity Should Be a Win-Win for America [Part 1]

George Gilder

Posted October 13, 2020

George Gilder

Recent US naval maneuvers in the South China Sea and the Taiwan straits raised the issue, “Should we risk war to keep China from subjugating Taiwan?”

Ever since President Nixon’s trip to China, and UN action recognizing Taiwan as part of China, the US has acknowledged the People’s Republic has ultimate sovereignty over Taiwan. But today, the US seems to be presenting itself as a guarantor of Taiwan’s autonomy in a way that is provoking intense resentment on the mainland.

But, as my editor and co-author Richard Vigilante suggests, better than a three-way military debacle is a path to a triple-win for all three countries. The American people can profit from the ascendancy of China together with its satellite industrial power, Taiwan.

But first we must give up the fantasy of US rule in the South China Seas.

The Battle Over TSMC

China is at least 20 times as powerful as it was when the US began its series of mostly failed Asian wars.

Admiral Nelson famously said “A ship’s a fool to fight a fort.” How about if the fort is defended by 1.4 billion people? Though Washington does not know it yet, China’s technology is now superior to ours — since the green-new-dealing, network manipulative, and high-tech immigrant shunning, the US has become a doggedly technophobic country.

Should we risk the destruction of our navy and final loss of our standing as super-power in a contest that would ultimately require an attack on the Chinese mainland?

Do we imagine that once this conflict was joined, the PRC would be the first to back down? Could we believe that anything could convince them to let us win a war in the south China seas?

The Trump Administration seems to suppose that this is our last chance to force the issue of a free Taiwan; the last plausible moment when our military superiority might intimidate the Chinese communists into letting go.

Trump may be right about it being the last moment, but this is not reassuring. Ten years from now Taiwan will still be 100 miles off the coast of China, and Chinese land-based missile technology will be able to sweep the US navy from China’s homeland seas almost effortlessly.

The Administration seems to imagine that we can bully Taiwan into separating its fate from the world’s second — soon to be first — largest economy, a few hours away by sea. Thus, it hectors Taiwan Semiconductor Manufacturing Corporation and threatens it with being cut off from the US market if it dares make chips for China. TSMC is the world’s most important microchip maker, the foundry that executes the designs of hundreds of US semiconductor firms, producing tens of billions in value for the US.

Today’s Prophecy

The Chinese can’t be bullied into giving up leadership in Taiwanese microchip technology that is crucial to their prosperity and defense. Nor ultimately will it make sense for TSMC or even the Taiwanese government to side with the US. China is a bigger market and soon will be the overwhelmingly dominant regional power. Of Taiwan’s investment over the last decade, 60% has gone to the Mainland. Guns and money beat lawyers and liberals every time.

What if instead of trying to grab Taiwan, we created a way to share it? Instead of making it a locus of conflict, we turned it into a premium for peace?

More on this tomorrow…

Regards,

George Gilder
Editor, Gilder's Daily Prophecy

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