What the China-Taiwan Conflict is REALLY About

[Dr Strangelove]

Donald Trump has announced the largest military aid package to Taiwan in history

The United States will sell Taiwan weapons worth $11 billion.

This is already the second tranche this year: the first, approved in November, amounted to $330 million. The decision still requires approval by Congress.

The package includes:

82 HIMARS systems
420 ATACMS missiles, 756 M31A2 MLRS rocket pods, and 447 M30A2 rocket pods
60 M109A7 Paladin self-propelled howitzers with ammunition
ALTIUS drones
1,050 Javelin anti-tank missiles and 1,545 TOW missiles
Tactical Mission Network software worth over $1 billion for command, control, and communications.

Taiwan thanked the United States, saying the deal will help the island “rapidly build strong deterrence capabilities.”

China’s Foreign Ministry urged the US to “adhere to the One China principle” and immediately stop what it called dangerous actions to arm Taiwan.

[al_keda]

In every simulation, the US loses to China 97% of the time.

Sure the US has some impressive hardware. But China went with cheap and numerous. The Gerald R Ford can stop 5 drone based attacks. But can it defend from 100? 1000? That's the direction China went.. Fire 100 'Sea Baby' type drones at an Arley Burke, see if it survives. If it does, send 500 more.

The US will lose, unless China is completely incompetent.

[Dr Strangelove]

[Dr Strangelove]

NYT: In 2023, CIA warned Apple, Nvidia, and AMD of possible Chinese invasion of Taiwan by 2027

According to the report, U.S. intelligence privately alerted major tech companies that Beijing could move against Taiwan within the next few years.

Around 97% of advanced chips are currently produced on the island. A blockade or destruction of its facilities could trigger a global economic crisis.

The warning was tied to U.S. national security concerns and aimed at pushing companies to diversify production away from Taiwan.

[Dr Strangelove]

[Dr Strangelove]

[Dr Strangelove]

[Dr Strangelove]

Chinese President Xi Jinping met Taiwan opposition leader Cheng Li-wun in Beijing:

“The leaders of the two parties are meeting today to safeguard the peace and tranquility of our shared home.

To promote the peaceful development of cross-strait relations.

We are willing, based on the common political foundation of adhering to the 1992 Consensus and opposing Taiwan independence...

To seek peace for both sides of the strait, to seek well-being for our compatriots, and to seek rejuvenation for the nation.

To firmly hold the future of cross-strait relations in the hands of the Chinese people themselves.”

[Dr Strangelove]

JUST IN: While every camera in the world is pointed at the Serena Hotel in Islamabad today, Xi Jinping shook hands with KMT Chairwoman Cheng Li-wun at the Great Hall of the People in Beijing. The first high-level KMT-CCP leadership meeting in nearly a decade. Xi told her: “Compatriots on both sides of the strait are all Chinese, one family.” He added: “Taiwan independence is the chief culprit undermining peace.” Cheng called her six-day trip a “journey for peace” and invoked the 1992 Consensus.

This did not happen by accident. It happened today.

The Iran war pulled American military assets out of the Pacific. Carriers, Marines, THAAD, Patriots, all redeployed to the Middle East since February 28. Brookings explicitly identified this as “strategic space” for Beijing. China then used its leverage over Iran (1.5 million barrels per day, Tehran’s largest customer) to nudge Tehran toward the ceasefire. Trump confirmed: “I heard yes” when asked if China persuaded Iran. The ceasefire was the entrance fee for the May 14-15 Beijing summit. Today’s KMT meeting is the pre-summit positioning play.

The sequence is architectural. China vetoed the UN Hormuz resolution on April 7 (preserving Iran’s leverage and its own intermediary status). China nudged Iran toward the bilateral ceasefire the same day (building goodwill with Trump). China scheduled the Xi-Cheng meeting for April 10 (the day Islamabad talks begin, when US attention is maximally diverted). And the May summit sits five weeks away, where Taiwan language will be tested in a room where China arrives with three diplomatic receipts: we helped you get the ceasefire, we kept the KMT dialogue alive, and we are the only power that can deliver Iran.

Meanwhile, the KMT-controlled legislature has stalled Taiwan’s $40 billion special defense budget for asymmetric capabilities. The same party whose chairwoman is shaking Xi’s hand today is the party blocking the weapons purchases Washington needs Taiwan to make to sustain the First Island Chain deterrence strategy that underpins US containment of China. Bloomberg reported that Beijing will “use the sitdown to argue that Taiwanese people are in favor of closer ties, sending a key signal to the US.” The New York Times said Xi is using the meeting “to cast Beijing as a peacemaker and squeeze the island’s president.”

Taiwan produces over 90 percent of the world’s most advanced semiconductors. TSMC commands 72 percent of the global foundry market. A full conflict over Taiwan would erase $10.6 trillion in global GDP in year one. This is not a sideshow. This is the main event wearing a mask.

Trump is a transactional president. He has already shown willingness to use allies as leverage (NATO “freeloaders,” Greenland, Panama Canal). China is betting that a president who just watched his NATO allies refuse to join the Iran war, who needs rare-earth supply chains for AI and defense, who wants a trade deal before midterms, will be receptive to a framing in which Taiwan is “handled” through dialogue rather than deterrence.

The Islamabad talks are about Iran. The Beijing handshake is about everything else. And the country that brokered the ceasefire, blocked the UN vote, moved its tankers freely through a closed strait, and met the opposition leader of America’s most strategically vital partner all did it in the same week.

The real negotiation is not at the Serena Hotel. It is already underway at the Great Hall of the People.

open.substack.com/pub/shanakaans…

[Dr Strangelove]

Taiwan should be dark by now. It is not. And the reason it is not is more alarming than the reason it should be.

The Strait of Hormuz has been disrupted since February 28. That is 46 days. Taiwan has 11 days of liquefied natural gas in onshore storage. If the 11-day figure were a countdown, the island would have gone dark on March 11, and 92 percent of the world’s advanced semiconductors with it. The lights are still on. Understanding why requires dismantling a number repeated without being understood.

Eleven days is not a stockpile. It is a rolling buffer, the legal minimum. Actual reserves have stayed above 12 days since the war began. Taiwan receives LNG at a rate equivalent to one tanker per day, and the 11 days measures the gap between the last delivery and the last megawatt. As long as tankers arrive, the buffer never depletes. Taiwan sources from 14 countries. Qatar one-third. Australia 34 percent. The United States 10 percent and growing. When Hormuz closed, Taiwan lost 33 percent of its gas, not 100. It replaced that third by outbidding on spot markets, accelerating non-Hormuz contracts, and burning more coal.

On April 8, Taiwan ramped Mailiao coal-fired units as LNG shipments slowed. Supply secured through May. Half of June arranged. Airlines raised prices. Fish prices surged as fuel fears kept boats in port. The island is not dark. But it is scrambling toward a deadline that arrives with summer.

Summer demand runs 40 percent higher than February. If disruption continues into July, Taiwan must replace one-third of its gas during peak consumption while competing against Japan, South Korea, and China for limited spot cargoes. The Asian LNG benchmark has more than doubled. Taipower faces 40 percent cost increases. The Atlantic Council warned of “power rationing, potentially disrupting semiconductor manufacturing.”

The supply side is not recovering. QatarEnergy declared force majeure after Iranian retaliation knocked 17 percent of Ras Laffan’s capacity offline, destroying two liquefaction trains and the gas-to-liquids facility. Repairs: three to five years. The source providing one-third of Taiwan’s gas is not delayed. It is structurally impaired for the rest of this decade.

Morgan Stanley identified the “LNG cliff” and a second threat: the sulfur squeeze. Sulfur, a byproduct of Gulf refining, becomes sulfuric acid essential for extracting copper and cobalt in chip components. The blockade threatening Taiwan’s power is also threatening the chemistry TSMC needs to etch wafers. Power and chemistry. Two vectors on the same fab. TSMC makes 90 percent of advanced chips and uses 9 to 10 percent of Taiwan’s electricity.

And here is the irony. The United States launched the strikes triggering Iran’s Hormuz closure, which damaged Qatar’s Ras Laffan, which broke Taiwan’s primary LNG supply. The same United States is becoming Taiwan’s dominant energy supplier. US crude exports to Taiwan grew from zero to 30 percent in a decade. US LNG could reach 30 percent with Alaska. The country that shattered the old supply chain is building the new one, and the dependency it creates is the deepest restructuring of Pacific energy architecture since 1945.

Taiwan is not dark. Not yet. The clock is not measured in 11 days. It is measured in the distance between May and July, between coal and gas, between a buffer and a cliff. And at the bottom of that cliff sit the fabs that make every advanced processor on earth.

open.substack.com/pub/shanakaans…