Taiwan Feels the Heat of US-China-Japan Tussle
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Just weeks into their uneasy truce, Xi Jinping has reminded Donald Trump of a bright red line that could unravel their trade deal.
Taiwan — the biggest flashpoint between the US and China — has returned to center stage after its quiet omission from their October summit in South Korea.
On Monday, Xi raised Taiwan during a phone call initiated by Trump to discuss fentanyl, soybeans and Ukraine. Xi cast China’s claim over the self-ruled island as an “integral part” of the post-World War II order and urged Trump to help uphold it, given their countries fought and won the war as allies.
In nodding to history, Xi was pointing squarely at the present.
Once the US and China’s common adversary, Japan is now a key American ally in Asia. Its recently installed prime minister, Sanae Takaichi, who enjoys a warm rapport with Trump, has enraged Beijing by suggesting Japanese troops could be drawn into a Taiwan crisis. To Beijing, that sounds like an echo of Japan’s wartime past.
Fortified Islands
Japan has been building up military bases along its southern island chain
Source: Bloomberg
So far, Trump and his lieutenants have refrained from publicly backing Japan in the dispute. Xi wants it to stay that way as his government ramps up pressure on Tokyo.
He used the call to remind Trump to tread carefully on Taiwan — a core issue that risks jeopardizing the “significant progress” the US president says both sides have made toward implementing the deal reached in South Korea.
From Xi’s viewpoint, there are reasons to worry. This month, the US approved a $330 million arms sale to Taiwan. And Taiwanese officials still hope to arrange President Lai Ching-te’s transit through the US after Trump denied him permission to do so in July.
Xi hardly needs a pretext to bring up Taiwan.
But with Japan tensions escalating — and Trump intent on stabilizing the relationship — the Chinese leader may see an opening to shape US policy in Beijing’s favor.
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Chart of the Day
China’s property market is bracing for a worsening crisis at China Vanke, as the state-backed builder struggles to convince investors it can avoid default without government support. Once the nation’s largest developer, Vanke plunged in credit and stock markets this week, and its woes spotlight the broader challenges facing Chinese policymakers. They are faced with the task of reviving a housing market stung by record builder defaults while trying to avoid getting mired in rescuing individual firms.
And Finally
After gold and diamonds, Russia has turned to Africa’s trove of fish, as Putin competes for influence — and money — in diverse yet depleted waters. The fishing industry represents several billions of dollars of hard currency to the Kremlin, which is modernizing its fleet and searching for new waters to trawl. Africa, with is over-fished but under-policed seas, only makes up a small fraction of Russia’s income at the moment, and it wants more.
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— With assistance from Anthony Halpin, Gordon Bell, and Ana Monteiro
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