“It is vital for Asean member-states to sit down with China and hold talks on joint-development (JD). While JD may not definitively resolve the thorny issues of overlapping claims, it would at least serve to minimise a potential conflict in the South China Sea.”

“UKRAINE today, Taiwan tomorrow” was the phrase that was echoing and reverberating over Taiwanese social media when Russia invaded Ukraine.

With Nancy Pelosi’s congressional trip to Taiwan recently and China’s incensed reaction, social media was again abuzz with worries about the possibility of an outbreak of conflict by accident.

Provocative actions by the People’s Liberation Army Air Force via intrusion of Taiwan’s air defence identification zone, and the scrambling of the island’s fighter jets for “interception” in response could lead to war if either side “pulls the trigger”.

But China’s invasion of Taiwan will come with a heavy price tag, not only politically but economically. It would be self-defeating as the disruption caused, to one of the Indo-Pacific’s major strategic and primary waterways and sea-lane communications routes, would be one where the costs outweigh the benefits. China’s own economy could be crippled.

Needless to say, China’s invasion of Taiwan will send shockwaves throughout the Asia/Indo-Pacific region.

As pointed out by the Australian Strategic and Policy Institute, the “major ports of Shanghai, Dalian, Tianjin and others are dependent on passage through waters near Taiwan”. The Straits of Taiwan “is the major conduit for shipping from North Asia to the rest of the world, and it is also the most direct route from south China to the US” (“A blockade of Taiwan would cripple China’s economy”, The Strategist, Aug 8).

An invasion and blockade would also cause mayhem to the global supply chain of microchips.

Taiwan holds 63% of global contracts for microchip production and a staggering 92% for the most-advanced semiconductor manufacturing capacity, according to a report by Boston Consulting and the Semiconductor Industry Association.

China alone is the destination for about half of Taiwan’s exports of integrated circuits. Taiwan-sourced chips are central to China’s exports of electronic goods. The loss of chips from Taiwan would crush China’s industries.

And China accounts for 60% of the world’s semiconductor demand, according to an October 2020 report from the Congressional Research Service. More than 90% of semiconductors used there are imported or manufactured locally by foreign suppliers (“Taiwan chip industry emerges as battlefront in US-China showdown”, Reuters, Dec 27, 2021).

Furthermore, “semiconductor foundries are located on the narrow plain along Taiwan’s west coast facing China, some 130km away at the nearest point. Most are close to so-called red beaches, considered by military strategists as likely landing sites for a Chinese invasion”.

As alluded, the South China Sea (SCS), which directly connects with the Straits of Taiwan, will see an inevitable spill-over from the conflict, not only economically, but in terms of security implications too.

The SCS is a contested area too among several Southeast Asian countries, with China and Taiwan overlapping as claimants.

Presumably, the invasion of Taiwan would also “entail” China, as rival claimant, seizing the Taiping/Itu Aba island, which is under Taiwanese control and administration. In turn, this would mean SCS would experience a full-blown conflict for the first time. This would have critical ramifications on the freedom of navigation that is dependent on demilitarisation and deescalation in the SCS, which the US has been at the forefront promoting via its Free and Open Indo-Pacific paradigm.

While the US may stay out of China’s invasion of Taiwan, as a purely internal matter, it may be hard-pressed to do so when it comes to the SCS. Moreover, any conflict in the SCS, which by default further militarises the SCS or increases China’s visibility, could provide US the pretext to intervene. After all, the US is back with its Indo-Pacific Economic Framework. A conflict in the SCS, with immense implications on the Indo-Pacific supply-chains, production network linkages, shipping routes and other geo-economic dynamics, may force the hand of the US in this regard.

Since the Philippines, another overlapping claimant, has traditionally closed military ties with the US as embodied by the Mutual Defence Treaty 1951, this will also give the US another justification to get involved.

Taiping/Itu Aba island is claimed by the Philippines too. The island also represents the northern gateway of the SCS into Taiwan and the rest of East Asia, and eastern half of the Pacific Rim.

This means, China’s attack on Taiping/Itu Aba island will further disrupt the Indo-Pacific supply-chain route/passageway, prompting the US, together with the Philippines, to take action.

In turn, this could lead to an all-out confrontation precipitated by one side wanting to enforce a corridor for the continuation of a free and open passageway in the SCS, with the other interpreting it as an act of belligerence.

Any conflict in the SCS would mean the US simply cannot afford not to intervene this time. Otherwise, it would render the implicit or tacit containment policy towards China – in concert with the Philippines, Vietnam and Singapore – ineffective. And, this would create a grey area over the whole security arrangements.

Both Taiwan and the Philippines are part of the “first island chains” for the Asia-Pacific geostrategy of the US. While the US may have to “tolerate” the breach in respect of Taiwan, it would certainly not do so when it comes to the Philippines and, simultaneously, the SCS.

The economic consequences for Southeast Asia/Asean would be severe. If a full-blown war were to erupt in the SCS, other member-countries or member-states with overlapping claims could be compelled to take part together with Australia and India, however token the participation.

Of course, all this is merely conjecture at present. Therefore, it is vital for Asean member-states to sit down with China and hold talks on joint-development (JD).

EMIR Research has been calling for the revival of the JD concept, first mooted by the venerable Deng Xiaoping (“Joint development of the South China Sea: The way forward to avoid conflict”, Jan 16, 2020).

While JD may not definitively resolve the thorny issues of overlapping claims, it would at least serve to minimise a potential conflict in the SCS.

Jason Loh Seong Wei and Nik Nurdiana Zulkifli are part of the research team of EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research. Comments: letters@thesundaily.com