The Widening Schism across the Taiwan Strait

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Introduction

The dispute over Taiwan, a self-governing island that sits 160 km east of China, is a simmering flashpoint that could bring the nuclear armed, economic giants China and the U.S. directly into war. Such a conflict would upend global supply chains and trade.1 One estimate puts the potential cost at a staggering $10 trillion, about 10 per cent of global GDP. The cost of an all-out war between the U.S. and China that involved nuclear weapons is incalculable.

The cross-strait dispute concerns differences over the Republic of China’s (ROC), or Taiwan’s, sovereignty.2 The ROC and the People’s Republic of China (PRC) have functioned as separate political entities since 1949, when the Chinese Nationalists lost to the Communists in the Chinese civil war. The Nationalists, or Kuomintang (KMT), retreated to Taiwan and the Communists established the PRC. But the PRC has since claimed Taiwan as one of its provinces and seeks to bring the island under its sovereign control - what Beijing calls unification. Taipei, for its part, maintains that it is a sovereign state known as the Republic of China and is not a part of the People’s Republic of China (PRC).