Wealthy, democratic and strategically located off the Chinese coast, Taiwan has long been the most volatile issue between the U.S. and China. Both sides have avoided serious conflict by leaving unsettled the question of who actually owns the island. But it’s becoming harder to avoid as China’s military ratchets up exercises near what President Xi Jinping views as his country’s lost territory. Standing in the way are the U.S. Pacific Fleet and Taiwanese voters, who emphatically rejected closer ties with Beijing in two straight elections. The tensions are raising the stakes for U.S. President Joe Biden’s efforts to craft a new way to deal with China.

1. Why is Taiwan so important?

Empires have jockeyed over Taiwan for centuries, with occupations by the Spanish, Dutch and China’s Qing Dynasty. The Qing’s loss of Taiwan to the Japanese after a humiliating military defeat in 1895 made “reunification” a rallying cry for generations of Chinese, including Xi’s. To the U.S. and Japan, Taiwan is a vital stronghold in a string of archipelagos that they rely on to contain China and safeguard trade routes. Taiwan has thrived under American protection to become a critical supplier of semiconductors and other high-tech goods. Today, the island of 23.5 million people is also among Asia’s most vibrant democracies, a rejoinder to Communist Party arguments that Western political structures are incompatible with Chinese culture.

2. Why is the island in dispute?

The fight dates to the end of the Chinese Civil War in 1949, when Chiang Kai-shek — leader of the Nationalist Party that ruled China after the overthrow of the Qing in 1912 — abandoned the mainland to Mao Zedong’s Communists. The U.S. backed Chiang as China’s rightful leader until then President Richard Nixon sought to establish ties with Beijing in the 1970s. The result was the “One China policy,” in which Washington recognized the People’s Republic as the “sole legal government of China,” without clarifying its position on Taiwan’s sovereignty. China agreed to tolerate informal U.S. relations with Taipei, including arms sales under certain conditions, but has since affirmed the right to take Taiwan by force to prevent its independence.

3. Why are tensions rising again?

Former Taiwanese President Ma Ying-jeou engaged Beijing in a series of negotiations culminating with an unprecedented meeting with Xi in 2015. But the landslide defeat of Ma’s nationalist party in 2016 elections upended Beijing’s plans for reconciliation and installed as president Tsai Ing-wen of the Democratic Progressive Party, which was founded on the promise of independence. Rejecting the nationalist party position that both sides belong to “One China,” Tsai was comfortably re-elected in 2020. Beijing has responded by cutting off communication, curbing travel, resuming efforts to lure away Taiwan’s few remaining diplomatic partners and pressuring airlines, retailers and other multinationals to revise policies that treat Taiwan as a country. More recently, Chinese forces have stepped up naval and air exercises near the island, sending ripples through financial markets. In April, a sortie of 25 Chinese planes entered airspace in which Taiwan reserves the right to intercept unidentified aircraft.

4. Where could the dispute lead?

A U.S.-China clash over Taiwan has re-emerged as one of the world’s biggest geopolitical risks, according to defense analysts. While the two nuclear-armed powers have plenty of incentives to avoid war, China’s rapid military rise has raised the risk of miscalculation. It fired “carrier killer” missiles into the South China Sea in August 2020, in an apparent warning that its military could threaten the ships Washington has long relied on to project power. One Chinese diplomat said in 2017 that a visit by an American warship could be grounds for an attack.

5. How has the U.S. responded?

Biden’s predecessor Donald Trump oversaw a dramatic expansion of ties with the government in Taipei, including the first fighter jet sale in three decades. Biden’s administration in April warned China against encroaching on Taiwan, voicing concern about tension fomented by Chinese “aggressive actions” in the Taiwan Strait and saying the U.S. stands by its commitments to ensure the island’s self-defense.

6. What does China want?

Although the Communist Party has never ruled Taiwan, it views control over the island as essential to completing its goal of reversing China’s “century of humiliation” by colonial powers. Xi has shown an increased willingness to assert such sovereignty claims from the South China Sea to the Himalayan Plateau and Hong Kong, where China has cracked down on opposition and imposed strict security laws following pro-democracy protests. Polls reveal a steadily rising share of Taiwanese in favor of independence — the thing that’s most likely to provoke a military move by China on the island. Almost a third of the population supports immediate or eventual independence, according to a November 2020 survey. Those in favor of unification with the mainland fell to less than 10%.

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