Hosted by Christina Ruffini and Sir Richard Dearlove
Guest
Episode Summary
US House Speaker Nancy Pelosi's recent trip to Taiwan has leaders worldwide concerned that it will provoke China and lead to a potential military conflict with the United States. One Decision's Julia Macfarlane and former Head of British Intelligence Sir Richard Dearlove sit down to analyze the motives and possible dangers of the visit. Sir Richard reveals why he thinks the trip is more than just a symbolic message and under what circumstances the rhetoric between the US and China could lead to a potential military conflict.
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Transcript
COLD OPEN
NEWS CLIP [0:00] You're listening to a special edition of One Decision. The world faces a choice between democracy
NEWS CLIP [0:07] and autocracy. America's determination to preserve democracy here in Taiwan and around the world remains ironclad.
INTRODUCTION
Lockwood: Nancy Pelosi, the United States Speaker of the House of Representatives, the number three Democrat, she made this trip to Taiwan, which the details of which had been leaked several weeks ago, and no one was really sure if she's going to go ahead with it. Something that hasn't been done for, I think, twenty five years. A senior American official has not visited the island that China claims is a renegade province and which much of the international community sees as an autonomous country. Many nations support its fight for independence. And the question I have really is, why now? Why did she go? Why did she choose this moment in time to make such a destabilizing, provocative move? I mean, she wrote an op ed in the Washington Post explaining why she was going to do this. And she started it off by saying forty three years ago, the United States Congress overwhelmingly passed the Taiwan Relations Act. One of the most important pillars of US foreign policy in the Asia Pacific. And she said that by going to Taiwan, was reaffirming America's commitment to this forty three year old piece of legislation. So my question to you, Richard, is why has she done this now?
ANALYSIS WITH SIR RICHARD DEARLOVE
Dearlove: I think to signal to China, to Xi Jinping in particular, that the world according to Xi Jinping and his, as it were, world view is not accepted by the United States. I think we have seen a transformation in the relationship between the United States and China, strangely initiated not by a Democratic administration, but by the Trump administration. And I think the one thing that Trump got right, well, he got several things right on foreign policy, was to, as it were, alert the world to the nature of the Chinese regime. In a way, it's quite a clever move by the Americans because of the separation of powers. The legislature and the executive are separate bits of the US government. Of course Chinese communist leadership find that hard to understand. But the executive is not going to order the legislature what to do. And I think the mood of Congress, as expressed by Nancy Pelosi, and I'm not a fan of hers at all, but in this particular instance I think this is a bold move, it's highly symbolic, the Chinese have reacted symbolically, but in a way you can see the Congress, through Pelosi, putting down a marker with the Chinese. And you've got to look at it in the context of the Uighurs, you've got to look at it in the context of Chinese expansion in the South China Sea, the nine dash line, you've got to see it in the context of Hong Kong, and there are many, many aggravations and concerns. And then of course we have this predatory commercial policy on the part of China, the theft of intellectual property, and all of the problems emanating from that. So you can see why there is this significant, I mean this is a symbolic move but it's a significant shift I think in US policy and probably very unusually in Washington at the moment, there's cross party consensus on this.
Lockwood: Right. But there broad bipartisan support from both sides of the aisle in terms of supporting the Taiwanese against China. But with the situation with the Uighurs, even the situation with Hong Kong, the national security law being passed in 2019 and the last vestiges of democracy really leaving Hong Kong in the outset of the COVID-19 pandemic. All of that has been in the last two years. And so I still don't really know why now, why this month, this year, this end of 2022, did she decide at a time when the world is dealing with a war in Europe, and looming interest rate rises, and a whole bunch of foreign policy issues to contend with, particularly with China. Would Nancy Pelosi want to light a match with Xi Jinping on this one? And it is interesting because Biden himself has made some remarks on the US would absolutely go and support Taiwan against Chinese, which the White House has then had to backtrack and maintain the strategic ambiguity, which is their official position on whether the US would, in fact, get involved if China did try to invade Taiwan, the way that they pretty much bulldoze the end of one country, two systems in Hong Kong, if we're going to use Hong Kong as an example. So why now? I mean, Nancy Pelosi's detractors have said this is Pelosi's showboating. But to what end? I mean, is there a midterms angle to this? There cause she can't be grandstanding in the hopes of any kind of political career move. She's a Speaker of the House, but she's also coming towards the end of her political career. So why did she do this at this particular moment in time?
Dearlove: Well, probably a combination of factors, but the main reason I'm sure is Ukraine. And the message to the Chinese is do not, as it were, think of Taiwan as the Russians have thought of Ukraine. And of course, the whole issue of deterrence relates to uncertainty. You do not know what your opponents are going to do in a crisis. And I think to raise that question in the Chinese mind, will America intervene militarily if the Chinese government try to, as it were, invade through the cross strait and militarily take over Taiwan. A bit cynical. I don't think this is a Nancy Pelosi initiative. I think this is something probably cooked up, which is maybe why the Chinese have reacted so badly, to send a clear signal to the Chinese. The President's not going to go to Taiwan, but Nancy Pelosi can, and it's a clear signal to the Chinese, don't invade Taiwan. And if you do and the US oppose you, the invasion will certainly fail. And you'll have a global or a Pacific war on your hands. I don't know. I would go as far as making that prediction or inference from these events. How else, I mean, you ask those tough questions, why now? That seems to me the logical explanation, why to why now?
Lockwood: Well, one thing I would like to do is poke holes in that decision, as journalists I want to do. And one thing I found very interesting in the last twenty four hours, is seeing actually several friends of mine, who are of Chinese descent, but who have grown up in the West, commenting about this. Because obviously, this is something that matters a lot to them. And actually, the overwhelming view was, while the move may have been well intentioned to support the Taiwanese, at a time when they are being increasingly fearful. Given the situation in Hong Kong, and also given the situation in Ukraine, as you rightly point out. But that this is not helpful, this is unnecessary provocation. And the reason why a lot of them have said this, is because what's happening in China, which is not getting a lot of attention. However, something we have looked, we have discussed on this podcast, is the growing financial sticky situation that Xi Jinping is finding himself in. There are some real domestic issues happening in China. The property crisis is really going from out of the frying pan and into the fire. There are people in China who have bought homes and have mortgages on homes that have not been completed. And they are refusing to pay their mortgages because of this property crisis. There are protests across the country, extending the risk of defaults from a lot of these offshore companies, which really prop up the Chinese economy, which is really where Xi derives a lot of his legitimacy on how he is building and growing the Chinese economy. There have been riot police in the streets across China. One friend of mine said that everyone he knows in the upper and middle classes in China is trying to leave and to get their money outside of China. He said some of them I've spoken to said that they were willing to take as much as a 50%, 70% haircut on their net worth in order to get out of the country. And so, what happens when you have a dangerous volatile situation in an authoritarian state like China, is if you then externalize the threat, you can have unpredictable consequences. And there's also the very legitimate question of, how is Xi Jinping being informed? Because we have seen really how Vladimir Putin, has so politicized his national security, his intelligence agencies. Who are now so fearful of giving him inconvenient truths, and reporting to him perhaps accurate pictures. Of how, say, an invasion into Ukraine may go down. They will not greet Russian troops with flowers and greet them as liberators. But they will instead take up arms against you as a foreign invader. They didn't give Putin that whole picture. What if the same is happening to Xi Jinping? And so, if you give him an external threat to distract the focus on, when he is looking every morning in his meetings that you've described, or we've talked about this on this podcast, the damage control meetings that the CCP leadership have every morning of which fires do we need to put out in which region. That there is now an existential threat. And China does see, or rather the Communist Party in Beijing does see Taiwan as existential threat, does it not? So, do you think that this visit by Pelosi to China may possibly do more harm than good? Or do you think the symbolism of the American government saying that it will stand with Taiwan is something that was actually a good thing for the Americans to have done at this particular moment in time?
Dearlove: I'm not sure there's a clear answer to that. I would agree with you that Xi Jinping's got huge problems. I mean a lot of them economic, a lot to do with zero Covid policy, and it's clear that the, as it were, central government at the moment is under huge pressure and is very unpopular in a sense of domestic economic issues. I think you're right to say that the majority of the population in China however see Taiwan as a unifying issue, a sort of national cause, and that therefore it's something around which the Chinese can rally if they are worried about other problems. So yep, maybe from that point of view the timing is not clever, but you don't necessarily get to choose the precise timing and there are so many variables and factors to be pulled in. I think at the moment the greater and the dominant worry is the Ukrainian example and I think the strong feeling in the United States that China needs to be sent a clear message of discouragement. And this is one way of doing it.
Lockwood: So that's my next question to you is, do you think perhaps this indicates that maybe the Americans think that the Ukraine situation has made things more dangerous for Taiwan. Because China may use the current situation in Ukraine as an opportunity for it to do something akin to what it did in Hong Kong, or some other means to try and reunify Taiwan with Mainland China at a time when the world is preoccupied with the situation between Ukraine and Russia?
Dearlove: I don't think so much of preoccupation. I think it's just the fact that a major international power could invade a neighboring country and start a war in such a manner when there's much international condemnation. But on the other hand Russia still has support and still has allies who are prepared to turn a blind eye or at least they're not prepared to criticize. I mean China must be sitting there thinking well you know most of the world recognizes our claims to Taiwan. We're in a strong position, de jure, in terms of international law. So maybe we can get away with this too. I think that the thinking would go rather along those lines. That's my feeling.
Lockwood: So then I would like us to return to the interview we did with the former Secretary of Defense in the United States, Doctor Bob Gates, because we talked about this, about whether Putin's invasion of Ukraine made things a little more worrying for Taiwan. And he gave quite an interesting answer where he said that, a lot of people say Taiwan is a fortress. It's a mountainous rocky island with no beaches where you could, it would be pretty much impossible to land any kind of amphibious navy to take the island by force. It's not like it's joined via the mainland like Hong Kong. But what he said was that what the Chinese could do is this strategy which he calls nibbling. And I quote, so they could seize a few of the Taiwanese islands that are actually much closer to China than they are to Taiwan, and basically assert that Taiwan does belong to China, and we've just shown it by taking these islands. Neither the United States nor Taiwan are gonna go to war over a few islands. Another option is quarantine to basically stop any resupply of weapons and so on to Taiwan at least by sea. And lastly, Xi can bring enormous pressure onto Taiwan without ever firing a shot through cyber and through economic measures. He could bring Taiwan to its knees and create huge incentives for Taiwan to have a very different attitude towards China. What do you think of that?
Dearlove: Yeah. I think in a way, Bob's probably got it right. There are options that the Chinese can follow to up the ante, short of a full military invasion. You're right, those islands in the Cross Strait which are technically part of Formosa, Taiwan are vulnerable. They could easily be taken by the Chinese. Taiwan could be more or less blockaded as an island and its resupply could become hugely problematic. And then of course you've got all these other technical means of making life difficult. So I think those roads would be explored first. The Chinese military, the People's Liberation Army, have been re-equipping and training for years to do an amphibious assault on Taiwan. But you've already indicated why that would be hugely costly and could possibly fail badly with massive losses. So it's not really logical at the moment for them to set off on some military adventure unless, and I think this is actually an aspect that one should consider. There's a political crisis inside China which is so severe that to distract attention, rather like the Argentinian generals' invasion of the Falklands, you've got the mass of the population behind you, but you've got a catastrophic economic or political situation at home. So I think there are a variety of scenarios, and I think there are probably a variety of warning signals that one would see coming. And I think at the moment, where we are is the Americans are putting down markers, saying to the Chinese, don't go there. Well, let's see what happens next.
Lockwood: So do you think this is more a spat between the Chinese and the Americans for now? I mean the Chinese have responded by blocking off these six sort of rectangles and the seas around Taiwan that effectively works as a sort of blockade. They're not completely ring fencing Taiwan, but they are flexing their muscles, shall we say, in the seas around Taiwan. And then we did have the Chinese Foreign Minister, Wang Yi, responded to Pelosi's trip saying, those who play with fire will not come to a good end, and those who offend China will be punished.
Dearlove: Well, it's not a spat. It's an ongoing source of tension. The question is, you know, whether China, as it were, stepped back once this, you know, blows over, or whether they're going to continue upping the ante. I think in the present international climate, one might well see the ante being upped by the Chinese with a similar American response. I mean we are in a period which is dynamic in terms of tension being generated internationally. And there are all sorts of reasons why at the moment it could get worse before it gets better. But I'm not sort of predicting yet, you know, military invasion or military conflict. I think one would see a lot of other things happening first.
Lockwood: What sort of things are you going to watch out for? What do you think we might see next? And what do you think will be a sign that things will actually start deteriorating?
Dearlove: There's a lot of Chinese money invested in Taiwan, and it goes through Singapore. So there's massive Chinese investment in the Taiwanese economy. I think if you saw that situation changing, you saw restrictions being applied by China to Taiwan economically, this would be a sign, you know, of the seriousness of the situation. I mean, the Chinese could do all sorts of things to bring Taiwan to the negotiating table, which would be coercive without being directly military. And at the moment it's more a war of words than an actual, as it were, escalation towards a real conflict.
Lockwood: And does that not seem like the more likely scenario that we will see? Because the US is not likely going to go to war because the Chinese start to put economic reins on Taiwan.
Dearlove: No. No. I mean, I agree. I mean, the Americans would, you know, bear in mind, the Chinese economy is not in great shape at the moment. And you've already pointed out there are signs of severe weakness and things are probably in China getting worse rather than better. And you know Chinese growth is threatened. And China itself socially is very, very vulnerable to a downturn in its economy, if the Americans on top of that start whacking international sanctions on China, the price that China would have to pay would be very, very high. And I think that China is socially brittle if and when its economy is going down the tubes, or let's say it's failing to expand. So it's not, I mean there are retaliatory measures that the global community, they would need global support. Obviously Russia wouldn't support it, there would be other means of pressurizing China. So let's see.
Lockwood: Well, the last question I want to ask you Richard, is how important is this to international community. And in particular, I'm talking about the fact that Taiwan is so integral to the global supply of chips and those semiconductors. That company that provides, I think, 60% of all the world's semiconductors. We rely on the situation in Taiwan being stable for our mobile phones, our computers, our cars, our household appliances, anything that is digital, basically. How far will the Americans go to safeguard that supply?
Dearlove: Well, I think what you see already is American anxiety on this issue with Biden's latest move on chip manufacturing. And I mean, in terms of conversations I had with friends in the States, and I've just been there for three weeks, reshoring or onshoring of these industries in the USA is a big deal. Obviously that will take time, but I think there's already a recognition that in these areas of strategic industry, the United States needs to onshore and to build its capability. And I've just read a fascinating piece about the opportunities for development in these high-tech areas in rural America rather than urban America. And there are some extraordinary initiatives in Iowa and other states at the moment which are designed, as it were, to take the United States into a strong position, looking at the next generation of chip manufacturing and biochemistry, looking at the two together. So I think that's where the US emphasis will be. But of course in the short term or short to medium term, there's a vulnerability because a lot of chip manufacturing, you're right, is located in Taiwan. I think that's going to be replicated elsewhere, frankly.
Lockwood: I mean, to me, that sounds like it's not great news for Taiwan. If the US and maybe other countries are sitting up and thinking, we need to diversify our imports of semiconductors and chips. Do you think that does spell stormy weather ahead for the Taiwanese?
Dearlove: Could well do. I mean, I think it, well, I'll put it like this. They will have plenty of other markets globally, but the US market, I think, will shift significantly over the next five years, to their disadvantage. And I think many countries are going to look very closely at building national capabilities. I mean, one of the lessons of the pandemic is that you can't, in a crisis, rely on global trade to provide you with what you failed to provide in your own manufacturing. So one's got to make some very tough and clear choices about things where you're onshoring or where you have dependable allies who are going to be providing that sort of strategic area of your national economy.
Lockwood: And we're seeing a very clear demonstration of that with Europe's energy crisis and the war in Ukraine.
Dearlove: Well, I mean, absolutely. Like 100%. And, you know, that is a problem that's going to take three to five years to solve. And in the meantime, life's going to be extremely difficult for a number of central European states in particular, like Poland, Czech Republic, Slovakia. There's a whole list of them.
Lockwood: That's all for this episode of One Decision. We drop new episodes every Thursday. Don't forget to subscribe so you never have to miss an episode. From me and the team, thanks for listening, and see you next time.
