Amid the U.S.-China trade war, Taiwan’s global tour has prompted a diplomatic war with Beijing, with reverberations across continents, and markets.
When communist forces defeated China’s nationalist government in 1950, the nationalists fled the mainland and set up in Taiwan, which has functioned as a self-governed democracy ever since. But as far as Beijing is concerned, Taiwan is definitively part of China and if too many buttons are pushed, it will reunite it by force. In the meantime, the rest of the world has to choose between China and Taiwan in terms of diplomacy.
With this in mind, Taiwanese President Tsai Ing-Wen’s global tour, which made a few stop-offs in the United States and Latin America, has launched one of the most heated diplomatic rows between the “rogue” province and Beijing in some time.
The U.S. visits in particular have Beijing outraged over what it views as a clear indication that Taiwan is shooting for formal independence. But Taiwan survives in a high pressure atmosphere, trying to maintain solid unofficial ties with countries.
The Taiwanese president stopped off in Los Angeles, then hit up Paraguay and Belize before re-entering the U.S. to visit Houston.
“Taiwan would not bow to pressure. Pressure would only make us more determined and united. It would only boost our determination to go abroad, said Taiwan President Tsai Ing-wen. Related: Is The iPhone X Too Successful?
Indeed, in her first stop, Tsai met with Republican and Democratic members of Congress, including Rep. Brad Sherman, a California Democrat who went as far as to call on the U.S. to formally invite the Taiwanese president to Washington in a move that would be decades of careful protocol. And it’s not lost on Beijing that American relations with Taiwan seem to be “warming”.
Taiwan is already feeling the consequences of its outreach.
Tsai's visit to Taiwanese coffee chain 85C in Los Angeles sparked Chinese public outrage and calls for a boycott of the chain in China—it’s largest market. The parent company’s share price plunged that same day—Thursday, 16 August—wiping $120 million off its value on Taiwan’s exchange.
There’s been more fallout, too.
Earlier this week, El Salvador severed diplomatic ties with Taiwan and affirmed ties instead with Beijing, cutting Taiwan’s list of countries that officially recognize its government down to 17 (nine of those are in Latin America and the Caribbean), the New York Times reported.
In the end, it will come down to money.
The past several months have seen Beijing step up the heat on Western businesses over Taiwan, most vehemently targeting hotels and airlines for how they portray Taiwan as a separate entity. And given the size of the Chinese market and its importance to these segments, Beijing easily wins this game.
So far this year, Gap has been forced to apologize for a T-shirt that shows China without Taiwan; a Japanese retailer (Muji) was fined in China for listing Taiwan as a company on packaging; and the Marriott Hotels website was shut down in China for doing the same. Taiwan isn’t just rolling over, though. Last week, it said it was cutting ties with Marriott over the row.
By Damir Kaletovic for Safehaven.com
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