Implications of a Coercive Quarantine of Taiwan by the People's Republic of China

Speaker(s): Martin, B. (Senior Policy Researcher & Director of the Institute for Supply Chain Security, RAND); Gunness, K. (Senior Policy Researcher, RAND)

Date: 21 September 2022

Speaker Session Summary

SMA hosted a speaker session with Dr. Brad Martin (Senior Policy Researcher & Director of the Institute for Supply Chain Security, RAND) and Ms. Kristen Gunness (Senior Policy Researcher, RAND) as part of its SMA INDOPACOM Speaker Series.

Escalation between China and Taiwan over Taiwan’s sovereignty is increasing, leaving the US and its allies with few options if China blockades Taiwan. While Taiwan nearly monopolizes the production of advanced semiconductor chips, this monopoly does not shield it from Chinese aggression. Dr. Martin argued that its control of advanced semi-conductor production may give it a reason to bargain with China. This reason is partly because Taiwan relies heavily on China for both its exports and imports. Furthermore, China is significantly better positioned economically to outlast Taiwan if it becomes sanctioned for overt aggression.

The US will likely need to use force to break a Chinese quarantine of Taiwan. Economic sanctions against China and the CCP would also severely hurt the US and its allies. The cost of either direct military intervention or sanctions makes it is unclear where or how the US should counter a Chinese blockade. Ms. Gunness argued that while China would likely use paramilitary forces to secure its blockade of Taiwan, the CCP does not want to escalate military tensions with the US. One commodity the US controls is intellectual property. The US controls more than 90% of intellectual property relating to advanced semi-conductors, while China controls less than 5 %. If China were to invade Taiwan, both the US and China would lose access to valuable semi-conductor resources.